Monday Open: $1,614.10
Weekly High: $1,615.50
Weekly Low: $1,556.90
Friday Close: $1,580.50

Gold whisked by the $1,550 mark on Wednesday, dropping 2% for the week to hit a fresh eight and a half month low. This week did not bring good tidings for gold bugs, as the yellow metal proved an 11% decrease already this year. A few factors contributed to this decline, including the projected improvement of major world economies, and, most notably, concerns that the Fed will drop its monetary easing policy, which would have a disastrous effect on gold.

Monday started the week off slow, maintaining a pretty level $1,610. Tuesday continued at a fairly steady pace above the $1,600 mark, as the dollar index continued to stay low. The lack of investor activity during the beginning of the week was largely due to anticipation of Wednesday’s Federal Reserve meeting.

Wednesday, the big news of the week struck as the Federal Reserve gave indication that they may change or halt their quantitative easing policies that have been a major source of gold’s soaring in the past three years. Gold has been volatile in the past year, and especially the last few months, recently because of expected improvements in the U.S. and European economies. Gold is seen as a hedge fund against failing currencies, however, the dollar has been strong recently, the European Union is on its way out of its sovereign debt crisis, and stock markets have been rallying worldwide, lessening safe haven interest in gold as investors stoke a riskier appetite.

So, on Wednesday, the Federal Reserve’s Open Market Committee released news that because of improved economic conditions, they may rethink their massive asset-purchasing program that has been in place and that was renewed in December. Gold, accordingly, suffered a major drop to hit a fresh 50-day moving average that is below its 200-day moving average. This, according to popular price analysis lingo, is dubbed a “death cross” because it usually signals an acceleration of price declines.

However, a Dow Jones report on Wednesday also revealed that a historical analysis of gold shows an exception to the “death cross” rule for gold; gold prices tend to rebound in the weeks and months after the ominous-sounding death cross. Also, investors may have overreacted to the Fed’s minutes, since the meeting’s proposal was inconclusive, Bernanke is a clear supporter of quantitative easing and the conversation is set to continue in March.

Thursday saw some short term recovering and a slight rise in prices, but Friday closed the week on a seven-month low.