About $2 billion was erased from the value of exchange-traded products tracking gold, silver, platinum and palladium on Monday. Investors pulled about $530 million from exchange-traded funds tracking commodities last week, or almost 1 percent of the funds’ market value. Citigroup Inc. analyst Aakash Doshi estimates that $2.3 billion was pulled from investments linked to commodity indexes in the week ended July 14, bringing total withdrawals since June 30 to $2.8 billion.

Hedge funds and other money managers are the least bullish on gold since government data begins in 2006.

David Fuller's view

The three main precious metals have fallen sharply recently, reaffirming overall downward trends as you can see from these 10-year weekly charts of gold, silver and platinum.  Palladium, the Russian controlled precious metal which showed relative strength up until last September has finally succumbed as well.

Today, an increasing number of people are asking one question: Why should I own precious metals in this environment?

I can only think of one plausible answer. 

Precious metals are becoming increasingly cheap relative to performing assets.  However, there is still no sign that sustainable lows have been reached.  Nevertheless, they now look at least temporarily overextended.  Therefore technical rallies can be expected before long.   

That is certainly not a compelling argument to buy precious metals.  There are numerous performing assets with attractive yields, not least in stock markets.  Nevertheless, we are beginning to see evidence of climactic selling in precious metals, particularly for platinum.  The lower these assets fall, the more interesting they become.