Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

Gold investors can only wish that they were having as good a September as their stock-investing counterparts. In contrast to the stock market's 3% gains so far this month, gold prices have moved in the opposite direction and increasingly appear vulnerable to traders seeking to push the yellow metal back down to its multiyear lows around $1,200 per ounce.

Today's big move downward got gold much of the way there, as spot prices fell $45 today to $1,322. The move sent shares of the bullion-tracking SPDR Gold (NYSEMKT:GLD) down 3% in sympathy, with further losses after hours reflecting further drops in the spot market after the 4 p.m. EDT stock market close. Silver suffered an even larger decline, with spot bullion prices falling almost $1.50 per ounce to $21.75 and the iShares Silver Trust (NYSEMKT:SLV) taking a 5.5% hit.

What's next for gold?
From a fundamental standpoint, much of the fear around gold has come from worries about the Fed's imminent moves. Because gold doesn't generate income, low interest rates for income-producing investments like bonds have made it easier for investors to own gold without giving up a lot of income potential or bearing large financing costs. As interest rates have started to rise, however, the opportunity cost of owning gold has gone up. In the long run, that could force some gold investors out of the market, reducing investor demand at an already-difficult time.

Disparities among the performance of different mining stocks shows how critical current gold price levels are to the industry. Large producers fell in tandem with the gold market, with Newmont Mining (NYSE:NEM) losing 4% and Barrick Gold (NYSE:ABX) posting a 5.5% decline. Those heightened losses reflect the natural leverage among mining stocks, whose profits drop more on a percentage basis for any given percentage drop in bullion prices. But smaller miners posted even bigger declines, as the Market Vectors Junior Gold Miners ETF (NYSEMKT:GDXJ) fell more than 7% today.

An unusual occurrence in the gold market also raised some eyebrows among gold investors. Overnight, a sharp $12 drop in December gold futures prices during just a couple minutes' time caused a circuit breaker to take effect, halting trades for a 20-second period. Traders noted that the price at which the event occurred was important from a technical perspective, which may have explained the volatility as gold prices challenged that level.

Watch the Fed
The Fed's decision next week could easily act as a catalyst for volatile gold price moves in either direction. If the Fed sustains the pace of its bond-buying longer than expected, then gold could recover much of its recent losses. But if tapering occurs more rapidly, then a return to $1,200 for gold wouldn't be out of the realm of possibility.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool has no position in any of the stocks mentioned, either. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.