The price of all precious metals plummeted on Friday and again on Monday as investors sort to liquidate profitable positions to raise cash.
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Gold, in particular, has been the victim of its own success, rising strongly this quarter on the back of growing investor anxiety about the wider economy.
Longer-held positions were showing a healthy profit. So, when investors faced demands for margin calls on falling equities, the first place they turned to was to take profits on precious metals and cover the margin calls.
Gold dropped 9% last week in its worst weekly performance since 1983, the Financial Times reported, losing some $237 from its year high of $1,703 on March 9.
Gold was trading at $1,505 on Monday afternoon but hit a low of $1,466 before staging a small recovery above $1,470 today.
Platinum and silver have been badly battered, too.
Platinum fell 26% to $588 on Monday, while silver fell 12% to $12.96.
Not only were profits being taken, but both metals are seen as heavily dependent on industrial demand (platinum in autocatalysts and silver in electronics). With industrial activity certain to be hit by the impact of virus-related shutdowns and supply chain disruption, the short-term prospects for both metals appears bleak.
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Interestingly, though, CNBC says that while the expectation is for further price falls, gold, in particular, could come back sooner than equities.
In the 2008 financial crisis, a similar pattern emerged with funds liquidating assets as share prices went into meltdown. Precious metals rallied from their October 2008 lows, up by 45% within months, whereas shares continued to fall through to March the following year.