NEW YORK ( TheStreet ) -- Gold prices tanked Wednesday, down more than $150 in two days, as durable goods orders jumped in July and gold investors rushed for the exits.

Gold for December delivery plummeted $104 to close at $1,757.30 an ounce at the Comex division of the New York Mercantile Exchange. The gold price has traded as high as $1,856.80 and as low as $1,761.10 during Tuesday's session, while the spot gold price was down $66.80, according to Kitco's gold index.

Silver prices sank $3.12 to settle at $39.16 an ounce. The U.S. dollar index was up 0.20% at $74.02 while the euro was down 0.09% vs. the dollar.

Gold prices, already at elevated levels, tumbled after orders for durable goods surged 4% in July. Excluding transportation, orders climbed 0.7%, with both numbers well above expectations. With macro data and growth prospects weak of late, the positive reading was a surprise and gave investors confidence to take profits in gold.

Gold was extremely overbought, rallying more than $300 in a little more than a month, and most experts were calling for a correction. This one came fast and furious. Gold also sank Tuesday falling as much as $80 from its intraday high of $1,917 an ounce, as worries over margin hikes hit markets and as investors opted for stocks. The Dow Jones Industrial Average rose more than 300 points on Tuesday, an uptrend which tentatively continued today.

Concerns that the Chicago Mercantile Exchange could raise the cost of purchasing an 100 ounce futures contract were still rattling gold prices a day after the Shanghai Gold Exchange raised margins by 1%.

George Gero, senior vice president at RBC Capital Markets, said that sell-stops, where traders are forced to sell positions, were triggered at $1,850, $1,825 and $1,800, which accelerated the selling. "The rapid selling did not counter ready buyers in an already overbought technical picture."

David Banister, chief investment strategist at, who said that gold could pivot at $1,907 an ounce, says the big support level is at $1,620 an ounce. "This is only year 10 in a 13-year bull cycle, Banister says, there are "still 3 years left, but this should be a multi-month consolidation."

Lower prices should bring out the physical gold buyers. In early trading on Wednesday, the physical market found some support particularly from India, as reported by Commerzbank.

"The price slump has obviously been used for physical buying, as confirmed by the Bombay Bullion Association, which estimates that precisely such price falls are increasingly being used for physical buying ahead of the festival season in India."

Over the past 11 years the gold price has averaged an 11% gain from mid-August through the end of December, mainly because the fall is a seasonally strong buying period. There is an array of festivals in India which gives consumers a reason to buy gold.

Commerzbank also said that Kazakhstan's central bank will buy the country's gold production -- 30 tons last year -- that otherwise would be exported. Although the country isn't a huge exporter, it underscores the trend that central banks are continuing to buy, not sell, gold, adding a key demand factor to the market. "The price of gold should initially sustain its upward trend," said the note.

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