Gold was set for its biggest three-day loss in 28 years on Monday, as investors fled commodity markets in a scramble to secure cash in the face of mounting fear over the impact of a potential Greek debt default on the rest of the euro zone.
European policymakers began working on new ways to stop fallout from Greece's near-bankruptcy from inflicting more damage on the world economy after stinging criticism for failing to stem the debt crisis.
European equities fell, while industrial commodities such as crude oil and base metals bore the brunt of investor desire for cash in the face of mounting uncertainty.
In the last three days alone, gold has fallen by nearly 10 percent in its largest three-day slide since February 1983 and implied volatility has risen to a 2-1/2 year high.
Spot gold was last down 3.0 percent on the day at $1,621.49 an ounce by 0903 GMT, having fallen earlier by as much as 7.4 percent, putting the difference between the intraday high and low at $128.40, the largest daily price swing on record.
Gosh, you mean gold is the next bubble to pop the way oil did in 2008? But the hyperinflationist crew told us that gold would skyrocket!
In a sense, gold really is up big from just a few years ago and still is. The problem is gold is up the same way housing was up during 2001-2008, and when it blew it took out all the floors. Housing prices are still dropping three years later and there's just no bottom in sight. Gold pushing $1,900 then now $1,600 means there's just as much market instability and volatility there are there is in stocks right now.
Meanwhile in a world where the dollar is "increasingly worthless" and "America is broke" and "hyperinflation is imminent" interest rates on US bonds 5 years and shorter continue to be well below 1%.
Still waiting for the Weimar Republic of the US, I guess.
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