The price of gold has slumped to its lowest level in nearly three years as a sell-off gathers pace following US plans to scale back economy-boosting measures.
Gold is on course for its worst quarter since at least 1968, having fallen below $1,200 an ounce for the first time since August 2010 yesterday.
The fall is bad news for central banks around the world as it has been decimating the value of their gold reserves.
Gold soared to an all-time high of $1,920 an ounce in September 2011, as investors bought into the metal to protect against bank failures, sovereign debt defaults and soaring inflation eroding cash investments.
Central banks worldwide have seen an eye-watering $655 billion knocked off the value of their gold, with the total value of holdings now worth $1.27 trillion, according to Bank de Binary.
Falling gold prices are also a blow to pawnbrokers, who have been expanding in recent years to take advantage of the leap in the price of the precious metal as households have sought to raise cash by selling unwanted jewellery.
Gold has been hit by recent comments from the US Federal Reserve confirming it will start tapering its economic stimulus drive later this year - as long as the economy continues to show signs of improving.
It marks the end of a remarkable decade-long bull run, spurred on after the financial crisis when investors began piling into gold as a safe haven asset.
As central banks worldwide also cut interest rates to record lows to counter the global recession that followed, even more turned to gold in a desperate attempt to seek returns, pushing up prices further. Investors also tend to turn to gold when the US dollar weakens.
But economies are on the path to recovery - prompting the Fed to say it can start to think about winding up its $85 billion a month asset-buying programme. This has raised the prospect of higher interest rates and has strengthened the dollar, which in turn is making gold less attractive.
However, analysts said the precious metal remained a solid investment amid global volatility. "The combination of a gold price that has effectively halved and an increase in the reasons to buy it tell us that it is undervalued to a truly extraordinary degree,'' they said.
