Gold bugs at this point can’t wait for 2011 to be over. The once high flying metal took another $20 hit in trading today sending it to levels not seen since July. The majority of the selling are funds liquidating positions to build their cash balance going into the new year. Traders want to be cash-flow positive so they are taking their profits now.

Recent economic data has also tempered demand for the metal on the futures market. Though you wouldn’t be able to tell if you looked at physical purchases on a local level. Those are still going strong as the average person looks to hedge against what they perceive as runaway government spending and monetary easing by Central Banks. The coming 2012 election cycle and the continuing EU crisis should help prop up prices in the long-term and drive physical demand.

Housing data released today also helped stem the flight to safe haven investments – typically precious metals. Pending home sales jumped to their highest level in 19 months. The Chicago PMI also has a better than expected reading, coming in at 62.5. While jobless claims jumped, they stayed under the ceiling that economists say is needed for modest labor growth expansion.

Precious metals investors looking for a ray of hope in this dismal week should look to silver. After dropping precipitously with gold over the past week, including a 5% drop yesterday, silver prices managed a gain today. Noted silver / gold bull Max Keiser said recently that the drop in precious metals is definitely a buying opportunity. He points out correctly that none of the economic woes in Europe have been fixed. Plus you have utter dysfunction in Washington, that will only get worse as parties jockey for position going into the election cycle of 2012.