Now a week removed from the worst precious metals sell-off in three decades, one thing is clear – gold and silver continues to flow from weak hands to strong hands, primarily from the West to the East, as lower prices have prompted record buying in Asia and the Middle East while U.S. investors in the SPDR Gold Shares ETF (GLD) continue to sell the metal.

Those who bought their GLD shares last fall are selling at steep losses.

This appears to be a classic case of not understanding what you own as most institutional investors and money managers who bought GLD late last year probably never really liked the idea of buying gold and, now, they just want out.

Presumably, many bought GLD on the recommendation of investment banks such as Goldman Sachs who, last fall, were predicting further gains for the yellow metal as the next round of Fed money printing got underway.

That didn’t work out the way investment banks thought it would.

So, here we are, a full week after the gold price plunged to almost $1,320 an ounce in panic selling and GLD investors continue to sell gold, many of them believing that they’re lucky to be able to get out now, at slightly higher prices than last week’s lows, making their realized losses a little less painful.

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A different perspective on valuing gold and the oft-cited reason (particularly over the last week or so) why the gold price has risen over the years, namely, that a greater fool has paid more for the stuff, is provided in this commentary over at the Cobden Center:

Can gold be valued properly?

Seems more like a zen koan than a question with a clear answer, doesn’t it? At one level, the critics are undoubtedly right: with no income stream and superabundant existing stocks, gold is entirely at the mercy of perceptions. Still, it’s also true that greater fools have shown up with reassuring regularity for the last few thousand years. Is that likely to change any time soon? We’re probably each obliged to answer that question individually. And to accept the consequences.

I’ve had a range of reactions when the subject of valuing gold comes up and I assert that there really is no way of valuing it. That makes a lot of investment pros very uncomfortable and is one of the main reasons why U.S. investors own very little of the stuff.