A sales representative shows a piece of gold jewelry at an expo in Guangzhou, South China"s Guangdong Province. File photo: VCG

　　On Friday, gold dipped below $4,500 a troy ounce, erasing its gains across the past two months. Gold, usually considered a safe haven during periods of economic uncertainty, has slumped. According to a CNN report on Saturday local time, gold dropped 11 percent this week, posting its biggest weekly loss since 1983.

　　As of Friday"s close in New York trading, spot gold fell 3.42 percent to $4,491.67 per ounce, a cumulative drop of more than 10 percent this week. COMEX gold futures fell 2.47 percent to $4,492 per ounce, a cumulative drop of more than 11 percent this week.

　　Chinese analysts said the market is currently experiencing a double whammy of liquidity shocks and expectations of tighter policy. Faced with such sharp fluctuations, investors should remain calm and cautious.

　　The gold price slump in 1983 stemmed from oil-producing countries selling gold to obtain foreign exchange amid falling oil prices-a supply-side shock. The current plunge, however, is driven by the US Federal Reserve"s management of expectations, which has sharply increased the cost of holding gold and, essentially, collapsed demand.

　　Analysts emphasized that the commonality between the two crashes is that the short-term pricing anchor for gold has never been safe-haven sentiment, but rather real interest rates and the dollar"s performance. This crash is both a correction of the overcrowded "interest-rate-cut trade" and a rational market adjustment to the real interest rate environment.