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Gold Prices Drop—No Surprise

Gold drops? Huh? It's not that surprising:

1) Gold is being used as a source of funds by traders who either need cash to cover margin calls, or are simply going to cash.

2) gold will not do well in a potentially deflationary environment. This happened before: in the worst part of 2008, when the S&P 500 dropped nearly 500 points in a matter of weeks, gold dropped from over $900 to $700.

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S&P 500
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  • A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

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