The price of gold fell sharply overnight, at one stage to below US$1,600/oz at at about 4am NZ time touched US$1,597/oz.
It has recovered a little, but ended the week in London at US$1,612.25 and in New York at $1,610.10.
It started the day at US$1,646/oz so the daily decline was -2.3% and has ended the week at its lowest level since mid August 2012.
In NZ$ terms the decline was -1.5% on the day with the price ending the week at NZ$1,910/oz a level not seen since August 2011.
For the short term, investors have clearly turned away from gold and a growing number are betting on a fall in prices. According to US Commodity Futures Trading Commission data, short positions in gold are close to an 18-month high.
The shift in attitude comes as signs of recovering growth in the global economy – and in particular in the US – which has pushed investors to other assets like equities. There has been a similar move away from bonds.
Some high-profile investors are selling out as well.
Data released on Thursday showed billionaire investor George Soros had cut his holdings in the SPDR Gold Trust, the world's largest gold exchange-traded fund, by more than half in the fourth quarter. Moore Capital made similar sell-down moves. However, John Paulson left his holdings unchanged.
Reuters reported analysts at Credit Suisse as saying "the increasingly bearish sentiment around gold ... has reinforced our conviction that the bull market peaked some time ago".
However, investors need to remember that softer prices at this time could well be because of a dearth of physical demand from China during its Lunar New Year holiday.
Chinese traders are expected to take advantage of the lower prices to replenish stocks when they return on Monday.
At current prices, whether in US$ or NZ$, adding to your gold holding now will give you 17% more ounces than at the peak in September 2011.
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