Shortly before noon, the price of gold was down more than eight percent and stood at $127.80 or about $1373.60 an ounce. Even in tough economic times, gold has traditionally been one of the more stable investments. It is now down more than $515 million from its all-time high of $1,888.70 in August of 2011.
Investors' intense trashing of the precious metal on Monday follows a five percent plunge that happened on Friday. The two-day selloff is the worst since 1980. Concerns that Chinese consumers, who are big buyers of jewelry, would purchase less gold was also a big factor in Monday’s drop in price, USA Today reported.
Chris Blasi of Neptune Global Holdings, a precious metals trading and research firm, said that investors are selling gold more aggressively because many view it as an inflation hedge. "Where is the bottom? I don't know. The selloff could go on another day or two," says Blasi.
When the price of gold dropped on Friday, many investors decided that it might be time to get out. According to Gary Kaltbaum, president of Kaltbaum Capital Management, Monday’s flurry of activity is just an extension of the process that began on Friday.
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"Gold was a very over-owned and a very big bull market and when it broke support, the masses got out," says Katlbaum. "When the big money guys own a boatload of stuff, and are all watching the same number, when support breaks, I call it the 'give up, we are done' response."