Shares in mining companies led the falls in London on Monday, as gold, silver, copper and other commodities resumed the meltdown that began last week, just a day after the metals had reached record highs.
The spot price of gold dropped to $4,649.9 an ounce, another 4.9% drop on the day, and silver slumped 7.6% to $78.18/oz.
Heavy selling started on Friday, when silver experienced its largest daily fall since 1980, with a 36% plunge from over $116/oz to intraday lows below $80/oz and 26.3% lower by the close, and a day after hitting a high above $120/oz.
Gold ended last week with its biggest one-day decline since 2013 or 8.95%, having dropped from $5,444 to below $4,900/oz, having peaked at almost $5,600/oz the day before.
Copper futures on the London Metals Exchange tumbled more than 5% to $13,157 a ton, having peaked at above $14,400 last Thursday.
Gold and silver prices are both still in positive territory compared to a month ago, up 4.3% and 2% respectively, while copper is down around 3%. All three are still much higher than they were a year ago, 65%, 148% and 34% respectively.
Miners led the declines on the FTSE 350, with Atalaya Mining PLC tumbling 8.7%, the BlackRock World Mining Trust PLC 6.6% falling 6.6%, then Pan African Resources PLC down 6.5%, Fresnillo PLC 6.2%, Hochschild Mining PLC 5.9%, Endeavour Mining PLC 6%, Antofagasta PLC 4.1%, Anglo American PLC 2.3%, Glencore PLC 2.1% and Rio Tinto PLC 1.4%.
The decline helped push the FTSE 100 and FTSE 250 into the red on Monday morning.
The record-breaking rally of both gold and silver was "clobbered...as the parabolic rally collapsed on itself", said market analyst Neil Wilson at Saxo.
"Things just go too frothy – this was like crypto markets at their worst; a massively crowded and leveraged long bet, and volatility that fed on itself as market makers couldn’t quote prices, leaving liquidity an issue.
"The level of volatility remains elevated, though we are seeing some bid come back into the market as of this morning, as a sign that we could be past the worst of the danger"
Macro strategist Jim Reid at Deutsche Bank said the recent run in precious metals felt like it had "an enormous speculative element", with Friday’s moves "almost certainly driven by positioning and margin dynamics".
He said a catalyst for Friday’s sell-off appeared to be news that Kevin Warsh had secured Donald Trump's nomination for Fed chair and his hawkish views on the balance sheet "[pushed] back against the prevailing debasement narrative that has supported precious metals. "It often takes only a small ripple to trigger a broader correction, especially when there is leverage around."