Gold has tumbled to its lowest level in nearly three years, putting it on track for its biggest quarterly fall since the collapse in 1971 of the Bretton Woods system of exchange rates, which pegged the value of the dollar to the precious metal.
Bankers said there had been a rush among wealthy individuals and asset managers to dump their gold holdings since Ben Bernanke, Federal Reserve chairman, last week set out for the first time a framework for the US central bank to exit its stimulus programme known as quantitative easing.
“The word at the moment is capitulation,” said Tom Kendall, precious metals analyst at Credit Suisse, adding that the past week’s selling had been driven by long-term investors. “Those are the guys who you would have expected to hold on through thick and thin and they’re not.”