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Whenever fruit is pressed - grapes, apples, olives - the first few turns of the wheel produce a small, but healthy trickle. A few more turns and the trickle turns into a gush until the fruit is all squeezed out.

Earlier this week, as the bellicose words between the West on one side and Syria, Iran and Russia on the other softened, the war premium was taken out of the precious metals markets. That would be the first trickle. 

Then, focus fell on the FOMC meeting next week, which a slight majority of analysts are saying will provide the beginning of tapering of QE3. A little more trickle as gold and silver were pressed. Then came technical selling, which generated a torrent of downward pressure. It took gold down 3% and silver down 5.5% today. 

However, we have to ask ourselves a number of fundamental questions. The biggest one we have in mind today is: Where is the money going?

The Dow, S&P and NASDAQ are all off (marginally). Oil and natural gas are up, but not dramatically. U.S., German and Japanese 10-year bond yields are off. Platinum and palladium are off. Copper, nickel and lead are off while aluminum is up a tiny bit. 

A fairly logical deduction is that more and more money is being sidelined. A corollary is that the equities markets are in a period of uncertainty because of Fed worries. Equites want QE3 to continue on one hand because it pumps more money into the economy. On the other hand, it wants it to taper so bond yields, which affect real interest rates, will come back down.

The downward cascade began overnight, gold prices falling so fast that an unusual event was triggered.

Nanex Research said that a mega sell order among gold-futures contracts caused a "circuit-breaker" to trip and shut down electronic trading on Globex for 20 seconds early Thursday. (Nanex provides sales, exchange reporting, and network access to direct financial data feeds.)

The CME Group termed the 20-second episode a "Stop Logic Event."

"A 20-second pause is the standard Stop Logic period for overnight electronic trading in our metals complex," a CME spokesman said when interviewed abut the event. "Stop logic introduces a momentary pause in trading, lasting between 5-20 seconds, to prevent excessive price movements from cascading stop price orders," according to the CME.

Meanwhile, the blacksmith cries out, "How are you going to replace human hands?!"

A "False Labor Data Event" also played into the decline of precious metals. There was an unexpected drop in the number of unemployment filings last week. But oops, two states didn't report in because of glitches in their new computer systems. So, what was going to be a big drop 

of 31,000 fewer claims will end up being a wash once all the data is reported.

Economists surveyed by major financial media outlets had expected claims to rise to 330,000 on a seasonally adjusted basis from an unrevised 323,000 in the last week of August. 

As Bob Dylan wrote in "Subterranean Homesick Blues": Don't follow leaders, watch your parkin' meters.