Gold slips 20pc in bear market

Gold has lost a fifth of its value since its record high last year, as fears that Greece leave the euro investors to move fast cash.

Futures contracts for the precious metal trade on Wednesday were 21pc down from their high last summer. Who scored gold for June delivery was in the territory as a "bear" market - when an asset plunges 20pc or more.

The spot price of gold has been flirting with a bear market to nearly $ 1,544 an ounce, down 19.5pc from its intraday high of $ 1,921 in September. The price decline was driven by the escalating debt crisis Eurozone, which is causing investors to liquidate their gold holdings.

While the metal is often considered a safe haven in times of economic crisis, in times of extreme market stress, people can start selling their gold to cover losses elsewhere. This phenomenon has been blamed for two golds strong sales in the second half of last year.

Instead of gold, investors are turning to the dollar as they flee the euro area and its common currency. The U.S. dollar index, which tracks the dollar's strength against six rivals, jumped on a 13th day to a peak of four months.

"Gold is just another risk-free asset," said Michael Aronstein, president of asset management Marketfield based in New York. "He made you a lot if you took the risk eight or 10 years.

"A safe haven is a pile of large bills in Swiss francs or dollars, stored in a safe," he told Bloomberg.

Others predict that gold will rise again, providing that a further escalation in the debt crisis Eurozone will send people flocking to the metal again. Furthermore, if the Fed resumes quantitative easing - in its efforts to print money - it would probably boost demand for gold, as people seek a refuge against inflation.

"At some point we will have a recovery, but it will be led euro and for the time being seems to be far away, given all the problems of the euro area," said David Govett to commodity broker Spectron Marex .