Is the euro-zone debt crisis causing investor apprehension?
''Short-term interest rates on dollars and other major currencies, have shot up this month, as banks have become increasingly unwilling to extend funding to each other because of fears over their individual exposure to the debt of the peripheral euro zone nations.
Gold is often sold off as a means of raising dollars when funding conditions deteriorate, much as they did in late 2008 with the onset of the credit crunch that ensued from banks withholding lending because of their concern over counter-party exposure to toxic U.S. mortgage-backed assets.
'Gold is one of the few assets that remains in positive territory this year, in a sense it is one of the last assets standing, and because of this as investors head for cash they sell the assets that have performed. Essentially gold is a victim of its own success as liquidity trumps,' wrote UBS analyst Edel Tully in a note.
Silver came under fire, falling by as much as 16 percent at one point in the day and set for its worst three-day fall on record, having lost more than 25 percent in this period.
The spot price was last down 4.9 percent at $29.54 an ounce, its lowest since last November.
Platinum fell by more than 3 percent to $1,543.75 an ounce, its lowest since May last year, while palladium fell 0.3 percent to $627.97 an ounce, its lowest since last October.''