Gold eyes biggest 3-day fall in 28 years, investors flee
Gold pared some of Monday's losses by midday in Europe but was still on course for its largest monthly slide in three years, as investors scrambled for cash in the face of mounting fear over the impact of a potential Greek debt default.
European policymakers began working on new ways to stop fallout from Greece's near-bankruptcy from inflicting more damage on the world economy after stinging criticism for failing to stem the debt crisis.
Industrial commodities such as silver and base metals bore the brunt of investor desire for liquidity in the face of mounting uncertainty.
In the last three days alone, gold has fallen by nearly 9 percent in its largest three-day slide since October 2008 and implied volatility has risen to a 2-1/2 year high.
Spot gold was last down 1.7 percent on the day at $1,628.29 an ounce by 1144 GMT, having fallen earlier by as much as 7.4 percent, putting the difference between the intraday high and low at $128.40, the largest daily price swing on record.
"It shows you that at times of extreme stress, there is not a suitable substitute to liquidity and although gold is liquid by metal standards, in comparison to treasuries, when you get this kind of flight to cash, then it really is cash that counts and that means US dollars," said Credit Suisse analyst Tom Kendall.
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