The adoption of an inflation target would likely mean more rate hikes since inflation is currently running above the Fed's perceived comfort zone. "To maintain credibility the monetary authority must deliver what they said they would deliver," Pool said. "Credibility is essential to the stability of longer-term inflation expectations." Currency markets did not react uniformly however, with the dollar mixed against major currencies. The greenback was buying 117.585 yen, up from 116.90 yen Friday. However, the euro was trading at $1.2698, up slightly from $1.2671 late last week. Gold tends to move inversely with the dollar, which itself is prone to rise on expectations of higher interest rates. The dearth of gold buying by jewelry fabricators in India as the fall wedding season starts in earnest was also weighing down on sentiment. "Jewelry demand is conspicuously absent, so the fickle money is leaving," says Jon Nadler, metals analyst at Montreal-based bullion dealer Kitco. As a result, he says, funds were continuing the process of unwinding positions that had started last week. "If we are heading into stagflation, then where will the discretionary income to buy baubles come from?," asks Nadler. Some reports pointed to rumors of central bank selling as a possible reason for the dramatic decline, as was possible redemptions by the exchange traded funds that hold the metal, the iShares COMEX Gold Trust (IAU - news - Cramer's Take) and iShares COMEX Gold Trust (GLD - news - Cramer's Take). The validity or otherwise of such assertions should become apparent before long as data is released over the next few days. The market has remained on watch the past few weeks as the European Central Bank looks less and less likely to sell the approximately 160 tons of bullion that remain in its quota under the terms of a multi lateral agreement that expires Sept. 26. Hence, when major downward pressure materializes, rumors of ECB involvement tends to appear whether or not based on concrete fact or not. The breach of technical support, which had been expected at around $600 an ounce level, triggered further selling giving the yellow metal little chance of a meaningful rebound. The Market Vectors Gold Miners (GDX - news - Cramer's Take), which tracks a broad-based group of stocks, was shedding 6.3%, while the Amex Gold Bugs Index, which tracks un-hedged gold producers was losing 6.4%. Shares of the miners were being slammed, with Agnico-Eagle Mines (AEM - news - Cramer's Take), Hecla Mining (HL - news - Cramer's Take) and Meridian Gold (MDG - news - Cramer's Take), down as much as 9%. Industry bellwether Newmont Mining (NEM - news - Cramer's Take) was losing 4%. Silver bullion was tumbling also with prices for December delivery closing off $1.06 cents at $11.20 an ounce on the Comex. The ETF that holds the metal, iShares Silver Trust> (SLV - news - Cramer's Take) was following suit, down 8.25%, recently. Although the white metal frequently follows the gyrations of the gold market, as an industrial metal demand is also affected by changes in economic activity. The metal could likely see further declines as increased evidence of a slowdown becomes apparent. The sector rout was slamming producers with Silver Wheaton (SLW - news - Cramer's Take), off 10%, and Coeur d'Alene Mines (CDE - news - Cramer's Take), lower by 7.5%. In base metals, copper wasn't immune from the mayhem either. Tension over a forthcoming set of labor negotiations, which could dramatically affect supply of the metal, failed to provide any buoyancy and contracts for December delivery of the red metal closed down 15 cents at $341.50 a pound on the Comex. Shares of U.S. copper producer Phelps Dodge (PD - news - Cramer's Take) were shedding 6.7%, while those of Southern Copper (PCU - news - Cramer's Take) were declining 5.5%. Among the larger diversified miners, shares Rio Tinto (RTP - news - Cramer's Take), and BHP (BHP - news - Cramer's Take) were falling 5.2% and 5.3%, respectively.