This is how the mainstream sees it; from the Associated Press.
Gold prices plunged 5.6 percent Wednesday as investors grew more confident about the global economy.
Gold dropped $104 to finish at $1,757.30 an ounce. It was the steepest percentage drop since March 2008. Gold is still up 24 percent for the year.
After markets closed Wednesday, exchange operator CME Group said it was raising its collateral requirements for gold trading. Earlier Wednesday China also required traders to set aside more collateral when borrowing money to buy gold.
Investors have been buying gold because of concerns about economic weakness in the United States and Europe as well as a stretch of severe volatility in financial markets that began in early August.
This is mere rationalization of the current events. Gold steep decline hasn't been about 'confidence', as these confidence has been artificially boosted.
As I earlier explained
Gold’s recent phenomenal rise has been parabolic! Gold has essentially skyrocketed by $1,050+ in less than TWO weeks! Gold prices jumped by 6% this week. The vertiginous ascent means gold prices may be susceptible to a sharp downside action (similar to Silver early this year) from profit takers.
In short, Newton's third law of motion applies "To every action there is always an equal and opposite reaction"
Gold prices seems as in a cyclical downturn, that's because of sharply OVERBOUGHT conditions. On the other hand, global stock markets has been on a bounce largely due to OVERSOLD conditions (backed by expectations of added steroids).
The correlations of Gold and equity markets has been predominantly positive, where gold prices has risen in the backdrop of rising equity markets, except for the past quarter (sorry I am operating in an internet cafe, that's why I can't attach charts to give evidence).
Gold prices will continue to rise over the long term as the welfare-warfare state will continue to inflate in order to meet political goals which has mostly been directed towards the preservation of the current political order.
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