Investors are wondering what’s happening to gold? After setting a record high in August, the precious metal has dropped by nearly 8% from its highs. Investors who had flocked to buy gold two months back are wondering whether it had been a right decision. Traders are analysing whether it is just a temporary pullback within a long climb upwards or is this just a first leg down in a longer correction. Given the yellow metal’s meteoric rise over the last one year, it probably is that the rally is being digested onto or profit being booked by international traders. Commodity experts are pointing at dynamics playing out for the gold’s recent weakness to the strength of the US dollar. They argue that gold and the US dollar tend to move in inverse directions. If the dollar loses value, then more dollars are required to purchase the same quantity of gold as before, thus driving gold prices up. On the other hand, if the dollar strengthens, then it requires fewer dollars to purchase the same quantity of gold, tending to push gold prices lower. Analysts trading in world currencies, including the US dollar, feel that while the dollar might have won the battle in the short term, it is gold which will eventually win the war in the medium term. Gold experts are of the view that the gold rally will escalate in the next few months pushing up prices higher. Investors who have bought gold in the last few months can definitely average out their holding by buying more of the precious metal for potential large upside in the medium to long term. Buying gold ETF from the secondary stock market is a good choice of investment for investors and traders alike.