What a month for gold.
After hitting US$1900 an ounce in early September, the precious metal tumbled to below US$1600 an ounce as investors worldwide dumped even supposed investment havens, such as gold, for the safety of cash.
You could hear the gold bubble advocates saying "I told you so". But the big question is whether a sharp fall in the gold price is a buying opportunity in gold bullion or gold shares.
Recent history is a guide.
Global exchange-traded commodity (ETC) specialist ETFS Securities said this week: "The moves [a sharp fall in gold] mirror those seen in September 2008 when gold acted as an important source of liquidity in the earliest stages of the post-Lehman crisis.
"Prices subsequently bounced back rapidly versus other assets in late 2008, with gold positions quickly being rebuilt as investors built diversified positions in perceived store-of-value assets."
Maybe. Gold bulls will lick their lips if the precious metal goes on another two-year tear like it did from March 2009.
Remember that gold took off from a much lower base in 2009: below US$800 an ounce, or about half current prices.
And there is even more uncertainty now with gold increasingly bought as a de-facto currency as Northern Hemisphere central banks competitively devalue their currencies.
Another issue is the Australian dollar.
Gold price movements are usually reported in US-dollar terms, yet what matters for domestic producers and local investors (depending on how they invest in gold) is the Australian-dollar gold price.
Investors using unhedged Australian Securities Exchange-listed ETCs for gold exposure, such as the largest, the ETFS Physical Gold ETC, must have a view on the Australian dollar, because further gains in our currency would dampen returns in unhedged gold ETCs.
Investors who believe the gold price might consolidate around these levels, after its bounce back in recent days, and that the Australian dollar will retrace previous gains could consider gold equities, which have lagged gains in the gold price this year.
In one of this month's more insightful reports, UBS considered the sustainability of miner margins across a range of commodities. It expected iron ore, thermal coal and gold to deliver the most robust margins of a suite of key mineral commodities over the next two to three years.
UBS noted gold equities had decoupled from the gold price in April 2011, due to rising costs, production difficulties, low merger and acquisition activity, and political and market risks.
It added: "An environment where global growth has slowed and cost pressure has diminished - but where the US authorities are seeking to reflate - provides an ideal environment for improving [gold] margins ... if we see a return to quantitative easing, we believe we will also see a strong initial boost to margins, followed by the return of cost pressure.
"If no quantitative policy is forthcoming, we would expect [gold] prices to press down, potentially faster than costs can correct lower - potentially putting sustained pressure on margins."
Active investors should watch for any deterioration in US economic data, which would increase the odds of a third quantitative easing in the US before year's end and further pressure the greenback.
A lower US dollar is usually positive for gold, although in such volatile markets even the strongest relationships can break down.
