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After Monday’s wild bout of panic selling, gold registered an almost unheard of triple-digit, single-day loss.Sean Kilpatrick/The Canadian Press

Gold is often touted as a haven in times of trouble, an indestructible store of value. But right now, investors in the yellow metal are asking: What haven?

In the past month, there have been a slew of events that would seem to bolster the case for holding gold, including Cyprus's partial confiscation of high-value bank account balances and Japan's decision to ramp its money-printing presses into high gear.

Yet, gold has been tanking. Over the past month, the precious metal tumbled a staggering $230 (U.S.) an ounce, vaporizing 15 per cent of its value to $1,362. Nearly half of that decline was registered Monday in a wild bout of panic selling that gave the metal an almost unheard of triple-digit single-day loss.

As money pours out of gold, investors are searching for a safe place to store their wealth but it's not yet clear what the next haven will be – or, for that matter, whether gold's long bull run is definitely over.

"I think people who really felt that gold was the ultimate safe haven are obviously very perplexed right now and looking for an alternative," observed Gary Shilling, founder of A. Gary Shilling and Co., a New Jersey-based money manager and advisory firm.

The simplest place to run is cash, at least in countries with a stable banking system operating under the rules of law. Unlike gold on Monday, cash won't suddenly lose nearly 10 per cent of its value in a few hours of trading.

Investors have often fled to Swiss francs in times of trouble, but Switzerland has pegged the value of its currency to the financially unstable euro. Elsewhere in the world, tiny Singapore has a sterling reputation for financial probity, but its dollar market is far too small to absorb massive inflows.

Given the drawbacks of the alternatives, Mr. Shilling says the obvious haven these days is U.S. government bonds. The market for U.S. Treasury bonds is huge and investors can be assured of being able to buy and sell the government debt quickly and easily.

Bonds do have risks, of course. Their prices move in the opposite direction to interest rates and, with yields at record lows, bonds would tumble if the cost of money begins to rise.

But Mr. Shilling says that with business conditions recently slowing and the U.S. Federal Reserve Board buying bonds to help the economy, rates are unlikely to soar any time soon.

Some investors and analysts remain convinced of gold's virtues and contend the selloff represents a buying opportunity. Gold tumbled nearly 30 per cent to around $700 an ounce in 2008 during the global stock market meltdown, only to later soar to new highs. Gold also had a series of violent tumbles in the 1970s, during its biggest bull market on record.

"As the old saying goes, 'Buy when there is blood on the streets, even if it's your own,'" said Ronald Stoeferle, a partner at Incrementum Advisors AG, a financial services firm in Baar, Switzerland. "I'm buying these days so I'm pretty confident that this is sort of a panic low."

Mr. Stoeferle said one reason he's confident is that many investors continue to buy gold bars and coins. There are no lines of nervous sellers trying to convert their gold into paper money.

The firm did some checking with gold dealers in Austria, Germany and Switzerland, and found that "people are buying like crazy … You don't see any panic, any selling panic, on the physical market," he said.

Although the gold price has been collapsing, the big downward price trend is actually being set in the commodity futures market where speculators deal in massive numbers of paper-based contracts to buy or sell bullion for later delivery, and not the actual metal.

Because speculators use leverage to amplify their profits, futures markets can have wild swings.

John Ing, gold analyst at Maison Placements Canada Inc. in Toronto, says that in his four decades of following precious metal stocks, he has never seen them so "oversold" – the trader's term for a stock or market that is due for a bounce upward.

He thinks the market will eventually stabilize and recover because major central banks continue to print money and gold miners are not having much success expanding output.

But he says he would be cautious about trying to pick a bottom in this market. "When somebody drops a safe from the 10th floor, you don't go down to the ground to catch it. You wait for it to bounce," he said.

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