Gold, the traditional haven from financial turmoil, is now being crushed by a market for which it seems ideally suited.
Over the past month, a triple helping of chaos – including Donald Trump's election in the United States, Indian currency reform and an Italian referendum – has surprised investors in three large economies.
Yet gold has only sunk lower and lower. Instead of seeking shelter from uncertainty, investors have chosen to place their bets on renewed prospects for economic growth.
That trend continued Monday as the suddenly not-so-precious metal hit its lowest point since February, falling as low as $1,158.13 (U.S.) an ounce, despite the unexpectedly lopsided defeat of Italy's establishment in a referendum on the weekend. A month ago, gold was above $1,280 an ounce.
The vote in Italy underlines concerns about the country's fragile banks. In more normal times, Italy's troubled financial sector might be seen as an excellent reason for European investors to take refuge in gold.
Similarly, India's decision to fight tax evasion by scrapping high-value banknotes last month would ordinarily be expected to spur demand for gold in that country.
For that matter, a Trump presidency was seen as a surefire positive for bullion only a few weeks ago. Forecasters believed U.S. investors would stampede into any asset that could offer shelter from Mr. Trump's peculiar brand of economics.
But that story reversed itself within hours of his election. The president-elect is now expected to pry open the national wallet of the United States. The prospect of tax cuts and infrastructure spending has boosted hopes for stronger economic expansion and dragged bullion decisively lower.
"Most pre-election gold commentary made it seem like the prospect of the Trump presidency would be markedly bullish [for the metal] due to the uncertainty surrounding many campaign promises, with many forecasts of $1,500 an ounce," Rory Johnston of Bank of Nova Scotia wrote in note.
Instead, Mr. Johnston noted, "the market narrative of a Trump presidency quickly shifted from one of uncertainty to a focus on stimulus spending, inflationary pressure and rising U.S. interest rates."
According to this new story, the president-elect will spur growth by cutting taxes and spending more on public works. Since stronger growth is likely to spur inflation, the Federal Reserve will push rates higher to keep a lid on the overheating economy.
Gold pays no dividends or interest, so any bump higher in rates makes the metal less attractive in comparison to bonds.
Higher U.S. interest rates also draw capital into the United States, bolstering the value of the greenback. That is bad for gold prices, which are typically denominated in U.S. dollars, because the stronger currency makes it more expensive for non-Americans to buy the metal.
Analysts at Citigroup said on Monday they have slashed their forecast for average gold prices in 2017 to $1,160 an ounce, down from $1,275 previously.
"The bearish outlook is driven by a strong U.S. dollar outlook post-Trump and the back-up in bond yields," wrote Alexander Hacking.
His forecast assumes a Federal Reserve rate hike next week followed by two more increases in 2017.
He downgraded his recommendation on Kinross Gold Corp. of Toronto to sell as a result of the weakened outlook for gold. He already had a sell rating on Agnico Eagle Mines Ltd. of Toronto.
Barrick Gold Corp. of Toronto is the only stock in the sector that earns a buy recommendation from the Citi analyst, while Goldcorp Inc., Silver Standard Resources Inc. and Newmont Gold Co. all get neutral ratings.
But gold investors shouldn't give up all hope. Mr. Johnston at Bank of Nova Scotia is sticking to his forecast of an average price of around $1,300 an ounce in 2017 and 2018.
Next year "could present a repeat of 2016's political surprises with an ample supply of European Union elections and referenda on the docket," he says.
If the results aren't to investors' liking, gold may come back into fashion with a vengeance.