Gold futures on Friday dropped by more than 3%, heading for the sharpest daily slide since November 2016.
Investors rushed to sell the precious metal to generate cash to cover losses in the stock market, which continued to plunge on rampant worries about the spread of COVID-19 epidemic and its effect on the global economy, analysts said.
“Investors absolutely see gold as a safe-haven, but the yellow metal is now succumbing to deleveraging pressure,” said Peter Grant, vice president of precious metals at Zaner Metals. “This is when investors sell profitable positions to raise cash during a market rout. Frequently the cash is used to cover margin calls in other markets.”