There's nothing more bracing in the morning than glancing at the trading screen and seeing nothing but red numbers. Domestic stocks: down; foreign equities; down; crude oil: down; gold: down, commodities: down. Ooops. There's a green number—the U.S. dollar.

Worldwide markets are taking a header over concerns about Greek and other eurozone nations' sovereign debt abound. U.S. traders piled on the fear wagon when disappointing jobless claims numbers were released by the Labor Department.

Most telling, though, was the destination of the capital flight—to the Yankee greenback, not to gold.

Gold's been, in fact, a liquidating market over the past week, making it especially volatile. After a selling wave pushed spot metal as low as $1,074 last week, bargain hunters poured in Tuesday to prop up prices at the $1,118 level. There was some backpedaling yesterday, but this morning's sell-off wiped out the week's price advances and then some. Spot gold sailed below its 100-day moving average, yielding as much as $43 an ounce in the first hour of New York trading.

That swoon put prices within a couple of dollars of a key retracement level for the July-December rally. If spot metal closes below $1,062 today, it will have given up half the gains made in 2009's second semester. Without strong buying hands, gravity could then pull prices into a decline to fill a gap left at $1,025 in October.

COMEX Front-Month Gold

With one more trading day left in the week, it'll be interesting to see how the book-squaring goes ahead of the weekend.