Wholesale London gold tumbled more than $20 per ounce in quiet trade Thursday morning, falling with world stock markets after the week's "three-day rally [in gold] prompted some profit-taking" according to one dealing desk.

"The fact that India," said investor, fund manager and best-selling author Jim Rogers to BullionVault overnight, "which has been the largest buyer, has reduced its buying a lot is one of the main factors that's causing gold prices to go down."

Currently blocking imports with high duties and strict re-export rules, "[India] can probably tolerate $30 billion worth of import of gold," said C.Rangarajan, chief of the Indian prime minister's Economic Advisory Council, to an economics conference in Delhi today.

"As inflation comes down and as financial assets become more attractive, perhaps part of the demand for gold can come down too."

Indian gold imports have totalled nearer $50 billion over the last 12 months, and are blamed by the Economic Times today for "inflating India's current account deficit to a historic high of 4.8% of GDP in 2012-13."

Noting plans to "mobilize" existing consumer gold holdings, "If the Indian politicians somehow get their people to sell gold, whoo!" said Jim Rogers to BullionVault. "Who knows how low gold could go?"

Adding that he's hedged a portion of his personal gold holdings against further price falls, but not his silver position, Rogers says the U.S. budget deal means "the government is under no constraint. Central banks can [also] print as much as they want.

"With all this staggering amount of currency debasement, gold has got to be a good place to be down the road once we get through this correction."

This week's U.S. budget deal will meantime "add pressure on gold and silver," reckons a note from Standard Bank's commodity team in London.

Although "tiny, miniscule" according to some commentators, the deal between Republican and Democrat politicians to avert a repeat of the debt-ceiling shutdown early next year now means "another hurdle to economic growth in the U.S. has been removed," writes analyst Walter de Wet, "and this increases the probability that the U.S. Fed may start to reduce their asset purchases this month."

So "from a tactical perspective," Standard Bank's de Wet concludes, "we still believe that gold should be sold into rallies."

Right now, says Jim Rogers, "I'm not buying either gold or silver...but if I had to buy one today, I'd buy silver because it certainly has gone down more than gold.

"So on a historic priced-basis if nothing else, I'd rather own silver."

If the two precious metals do fall sharply from here, he added, "I hope I'm smart enough to buy more."