More than 60% of today's decline in gold was due to dollar strength. Silver, however, struggled through that headwind to rise slightly. 

The dollar fell primarily because the ECB seems on course to ratchet down their overall interest rates to combat chronic unemployment and stagnation in the zone. Apparently, Angela Merkel and the Germans are no longer opposed to this. Basically this means that the most credit-worthy institutions in Europe (hopefully not in Greece, et al, will be able to borrow money essentially at no cost.) When the actual move will come is not clear, although it probably won't happen this week during the ECB confab. 

More likely it will be agreed upon and then implemented. But, even though it doesn't seem so, the world watches the ECB meetings as closely as it watches the Fed. The ECB is considerably less transparent than the Fed, which is why we don't hear as much news out of it. We will be taking a close look at their language once their mettings are concluded and their releases are out. 

Additionally, a report on the service sector of the U.S. economy was issued today and it showed surprisingly robust growth. 

According to Reuters: "U.S. service sector business activity picked up in October, with the Institute for Supply Management's services index up to 55.4 last month despite expectations by economists for a dip to 54. A reading above 50 indicates expansion."  

Gold has lost about 3% during its seven-day drop, the longest and steepest decline since mid-May, weighed down by strong outflows from exchange-traded funds in gold based on worries that the U.S. Federal Reserve may cut its monetary stimulus. 

Tomorrow, Wednesday, investors will shift their focus to Friday's U.S. non-farm payrolls numbers.

A weak reading between 90,000 and 130,000 is likely to be discounted as reflecting temporary shocks from the shutdown, but a strong reading (above, say, 150,000 will force the market to reassess the likelihood of January or even December tapering. The strong reading seems unlikely. The number may come in right on the cusp of "moderately weak,' throwing open the door to more speculation and tea-leaf reading. 

Oil, the proverbial outside influencer, took another hit today, tumbling another dollar in price and heading south toward the $93 level. Of course, this is a key commodity that, even when factored out of the convoluted government inflation measures, has a big influence on how the economy will do. Cheap oil means more money to spend elsewhere. 

Volume has been bracingly low in gold trading of late as much money normally involved in the market has taken a seat on the sideline, adopting, much as we have, a wait-and-see attitude. This may change come Friday and the labor report for October. 

"It's just to taper or not to taper," said Wilmer Stith, portfolio manager of the Wilmington Broad Market Bond Fund. "At the end of each day, that's going to be the primary focus."