"The metal is down 8.2pc this week at $1,574 (£1,016) and on course for its first quarterly fall since 2008, when the financial crisis began.
If another round of sell-offs today means the Friday-to-Friday fall exceeds September's 8.6pc drop, market watchers say it would mark a price plunge rivalling those of the early 1980s.
Gold's safe haven status for investors in times of economic turmoil has seen its price hit record highs this year. But, counterintuitively, when conditions turn very negative, the gold price may drop – as seen in the immediate aftermath of Lehman Brothers' failure.
"In a period of liquidity contraction and severe distress, investors need to raise cash and gold prices suffer," said Sabine Schels, head of fundamental commodity research at Bank of America Merrill Lynch. The strong dollar is also weighing on gold, as it encourages people to sell their holdings to take a profit in their own, weaker, currency.
"In September, to a large extent gold performed exactly as it should have," said Suki Cooper, a precious metals analyst at Barclays Capital. "It's been an asset where you can raise cash. The need for liquidity has again pushed the gold price lower."
More from the source: Investors cash in as gold falls - Telegraph
If another round of sell-offs today means the Friday-to-Friday fall exceeds September's 8.6pc drop, market watchers say it would mark a price plunge rivalling those of the early 1980s.
Gold's safe haven status for investors in times of economic turmoil has seen its price hit record highs this year. But, counterintuitively, when conditions turn very negative, the gold price may drop – as seen in the immediate aftermath of Lehman Brothers' failure.
"In a period of liquidity contraction and severe distress, investors need to raise cash and gold prices suffer," said Sabine Schels, head of fundamental commodity research at Bank of America Merrill Lynch. The strong dollar is also weighing on gold, as it encourages people to sell their holdings to take a profit in their own, weaker, currency.
"In September, to a large extent gold performed exactly as it should have," said Suki Cooper, a precious metals analyst at Barclays Capital. "It's been an asset where you can raise cash. The need for liquidity has again pushed the gold price lower."
More from the source: Investors cash in as gold falls - Telegraph
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