The price has plummeted almost $50 back below $1700 per ounce to a point of $1675 today with trading looking dismal for the metal. Investors around the world seem to be dumping the bullion as well as shedding dollars in GLD and IAU.

The price of gold shed over $300 or just under 16% in the month of September as the world watched the European economy come back under scrutiny and growth in America halt or reverse in some markets. So what does that mean for the price of gold?

Well some would say that if growth is down and interest rates are near 0% that the chance for deflation remains extremely high. Deflation has long been the enemy of precious metals like gold and silver.

However, both Europe and the US governments have made mention that to combat the slowing economies they will most likely take measures to boost growth by pumping money into the system once again, in some way or another. What that means is a potential to stem deflation or create inflationary pressures.

Inflation again, helps precious metals gain in price.

That could be some of the $25 price move we’re observing today with the price of gold. The sell-off profit taking and worrisome pressures have been stemmed by manufacturing numbers coming back higher and governments vowing to, well, inflate the economies.

There is some good news on the Europe debt situation (Greece), because of speculation of a massive bailout plan that may come to pass. Speculation and hopes are building that a massive multi-trillion-bailout plan is being prepared to save the Euro zone.

The plan would include a recapitalization of Euro banks via private funds or by the European Financial Stability Facility (EFSF). The EFSF may also be leveraged in order to provide more resources without having to receive approval by national parliaments.

This is similar to the plan Tim Geithner discussed on September 16th in Poland. ECB board member, Lorenzo Bini Smaghi, explained that monetary officials in Europe have already begun to discuss the next steps to take in solving the debt crisis.

If the bailout doesn’t come to pass, then you can expect a domino like effect to hit Europe, because if Greece falls, others will fall as well. This is disturbing news to say the least, as America would more than likely be faced with another recession if Greece defaults.

The IMF released a statement over the weekend that read:

“The global economy has entered a dangerous phase, calling for exceptional vigilance, coordination and readiness to take bold action from members and the IMF alike. We are encouraged by the determination of our Euro-area colleagues to do what is needed to resolve the euro-area crisis. We welcome that the IMF stands ready to strongly support this effort as part of its global role.”

All this is a lot of information to take in, especially when you consider how this affects gold. One can’t really say one way or another how Europe’s debt issues will affect the overall state of gold.

On one hand, it could send gold to price levels never seen before, well over the $2,000 an ounce range because of investors and others trying to protect what precious money they have left.

On the other hand, we all know that cash is king, so investors may want to continue with the current selloff to gain any form of cash they can, especially if we head into another recession.

Gold for December delivery GC1Z -2.05% declined $45, or 2.7%, to end at $1,594.80 an ounce on the Comex division of the New York Mercantile Exchange, the lowest settlement since July 21.

“Short term, there’s clear demand destruction in gold derivatives right now,” said Adrian Ash, head of research at BullionVault.com, in emailed comments.

CME Group late Friday raised margin requirements for some gold- , silver- and copper-futures contracts, adding pressure to metals prices Monday. Margin is money investors must put up to be able to trade and hold futures contracts. You can see that report here.

It is clear that investors had millions upon millions of dollars in gold and silver, and now both the meals are taking massive reduction hits because of the selloff.

That being said, gold and silver are still one of the best places to invest your money, as at least your money will be safe in these metals.

Gold was acting as a safe haven for most investor’s money, however most of these same investors have had to pull their money out of gold and use it to cover massive losses from the market. The past two days alone has seen the stock market tumble over 600 points.

The most actively traded gold contract, for December delivery, fell $55.20, or 3.2%, to $1,686.50 a troy ounce in early trade on the Comex division of the New York Mercantile Exchange. This was the first time the contract had traded below the psychological level of $1,700 in almost two months.

“The most important thing that all financial markets crave…is some sense that politicians are prepared to take bold policy decisions on the economies,” said Ross Norman, chief executive officer of London-based gold-bullion dealer Sharps Pixley.

Gold prices are continuing to crumble due to the fact that investors need to put out investment fire losses in other areas, as well as sell off their gold in favor of cold, hard cash, which we all know is always king.

Gold, which has been a safe haven from global political and economic uncertainty for much of this year, has suffered a big setback this week amid losses in many other asset classes. The current state of gold is a far cry from the projected $2,000 per ounce price range that many experts were predicting.

It should be interesting to see what happens with gold during the rest of 2011. When all is said and done, gold is still probably going to be a great investment. After all, it is still gold!

Gold for December delivery was sent plummeting down $51 to $1,757.10 an ounce at the Comex division of the New York Mercantile Exchange. The gold price has traded as high as $1,789 and as low as $1,749 while the spot gold price was down almost $26, according to Kitco’s gold index.

What can we takeaway from this? The only word that comes to mind is “PANIC.” Which is what all these investors are doing. Rightfully so I guess, as the money they have in gold is at least able to keep many of these investors afloat, even when their other stocks and commodities take a huge hit like they did today, and the past few days.

The price of gold is very volatile right now. Recently it was hovering over the $1,800 an ounce mark on its way to $2,00o an ounce. However, with the rising fears in Europe and the Federal Reserve’s downgrade of the U.S. economy, investors are in the midst of a sell off of gold just so they are able to survive.

Gold prices will continue to be volatile for the foreseeable future, with gold acting as a safe haven for money in the long run. It should be interesting to see what gold prices do in the next few weeks after all of these cash starved investors finish this needed gold sell off.

RBC Capital Markets went on to say that lower moving averages, lower open interest, lower highs all contribute to selling based on technical charts. “Dollar’s strength, euro weakness and heavy selling pressure from overseas contributed to commodities selling off as anti-inflationary expectations are raised by lack of economic improvement according to the Fed, and downgrades of banks and economic growth from different sources,” they say, noting $1,650 is the next support area.

Keep an eye on gold futures, as now may be the best time yet to get invested in them while the prices are this low.

Some investors (both big and small) are a little worried. The price drop signifies a correction in gold price, which may bring gold down even further. However, gold prices have been as volatile as ever over the past year, so I wouldn’t read too much into the price drop. We know that at any given moment, the price of gold can spike right back up.

Seeing that the economy is still in the toilet, nobody likes the President’s new job and spending plan, and investors are continuing to look for a safe haven for their money, I would say that gold is still a great bet for your money.

The price of gold will probably shoot back up, and even hit the $2,000 an ounce price mark by the end of the year. If it doesn’t; well, it is still gold, and there is still going to be a vast market for it.

Get invested in some gold now while the price has dropped a little. If is a great way to protect your money, and even get a quick return of investment.

Speaking at the London Bullion Market Association’s annual conference in Montreal, Som Seif – the chief executive of Claymore Investments Inc., said that the price of gold should break $2,000 a troy ounce later this year, with sister metal silver following higher and breaking $50 an ounce as investment demand for bullion continues to grow.

“Our view for gold to cross $2,000 an ounce this year. In that eventuality, silver would be above $50 an ounce, but we then see a silver price of $75 an ounce if not more” as investment demand drives an implied deficit in the market, Seif said.

This is what I have been saying all along. The economy is just in to rough of shape for precious metals not to jump even more than they already have by the end of the year. Gold and silver are both just about the only sure bets left when it comes to putting a protective blanket over your money.

You can keep a close watch on the price of gold. If you believe what I have been saying about the price hitting $2,000 per troy ounce by the end of the year, then investing in gold now would be a smart idea.

Donald Trump, real estate mogul and TV personality has accepted gold bullion as a security deposit from APMEX for the Trump building location in Wall Street they will be occupying in New York City.

Some people may think this isn’t big news, Donald Trump does crazy things all the time. But what some may be overlooking is the fact that gold is being used as a currency here, that hasn’t been done in the US, at least not in large quantities, for years.

Could this be signaling things to come for the US dollar?