Palladium led a free fall in precious metals on Friday, slumping nearly 13 per cent at one point.
Gold slid as much as 4.6 per cent en route to its biggest daily drop in almost seven years, as coronavirus drove panic-stricken investors to liquidate assets across the board.
The rout hammered other precious metals as well, with platinum declining as much as 6.1 per cent and silver sliding 7.4 per cent.
“A lot of investors and traders are having to meet margin calls for other products, so they are selling what they can. That’s why it is hitting gold and the gold mining stocks,” said Michael Matousek, head trader at US Global Investors.
“People are trying to sell whatever they can. It’s an overall sell-off.”
Spot gold plunged 4.5 per cent to $US1,568.96 per ounce leading to the biggest one-day percentage decline since mid-2013. US gold futures settled down 4.6 per cent at $US1,566.70.
The precious metal saw sharp price swings this week, having hit a seven-year high of $US1,688.66 on Monday. The metal is now on track to post its steepest weekly decline since November, 2016.
The rapid spread of the coronavirus raised fears of a pandemic, with six countries reporting their first cases and the World Health Organisation warning it could spread worldwide.
The virus panic sent world share markets on course for their worst weekly fall since 2008, with almost $US6 trillion wiped from their market value so far this week.
In other precious metals, palladium was down 10.8 per cent to $US2,538.21 per ounce, its worst one-day performance since the 2008 financial crisis, after slumping 12.7 per cent earlier in the day. The metal has shed about $US390 from a record high of $US2,875.50 hit on Thursday.
Platinum shed 5.5 per cent to $US849.63, facing its worst weekly fall since 2008.
Silver plunged 7.2 per cent to $US16.43 an ounce, on track for its worst week since 2011.