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Gold was in another correction mode on Wednesday -- the sixth in less than a year -- dropping briefly below $1590; a big disappointment to the bulls, betting that the world will come to an end by early this year. Silver dipped below $29.

(Click to enlarge)

(Click to enlarge)

Gold ETFs like SPDR Gold Shares (NYSEARCA:GLD) were also sharply lower (down 1.86 percent); silver ETFs like iShares Silver Trust (NYSEARCA:SLV) followed through in sympathy (down 2.12 percent), and Freeport McMoRan Copper and Gold (NYSE:FCX) was down 2.57 percent. Other metals like Palladium (NYSEMKT:PAL) were down more than 5 percent. What's going on? Is the precious metals bubble bursting?

It is hard to say for sure. What we can say, however, is that the technicals do not look terribly good for the bulls. And many of the factors that blew air to the bubble are no long on investor radar.

First, inflation, the ultimate tailwind for the metals is nowhere in the offing, as evidenced by today's meager Producer Price Index (+0.2 percent).

Second, equity markets around the world are on the mend. This means that some money parked in precious metals may be headed to equities.

Third, European sovereign debt risks seem to be evaporating for the time being, as the EU and the ECB seem to have things under control, at least for the time being.

Fourth, an improving U.S. economy will make it less likely that the Fed will launch another round of Quantitative Easing (QE) -- the primary fuel of the recent gold rallies. Besides, Fed's QE impact on the dollar and the metals has been increasingly neutralized by ECB's and Japan's QE.

Fifth, anxiety over Abe's promise to print yen until it creates 2 percent inflation in the land of the rising sun.

Compounding the problem of weak fundamentals is the crowding of precious metals trades, which can make the exit from these investments extremely painful.

Bottom line: The best days may be behind for the precious metals, at least until the next crisis, provided that central bankers still have enough ammunition to fuel another rally.

Disclosure: I am long FCX. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.