Gold and silver both pared losses later in the day, yet have taken a huge hit since earlier in the month.
Spot gold tumbled as much as 7.4 per cent to a low of $1,534.49 yesterday, its weakest since early July, before cautious buying repaired some of the damage.
Gold has fallen by nearly nine per cent in its largest three-day slide since October 2008 and implied volatility has risen to a two and a half year high.
Spot silver dropped as much as 16 per cent to $26.04, a level not seen since November 2010, and platinum slid as much as nine per cent before paring losses.
“It shows you that at times of extreme stress, there is not a suitable substitute to liquidity,” said Credit Suisse analyst Tom Kendall.
Other highly-traded commodities also took a knock yesterday, with copper -- often a bellwether for the strength of the global economy -- suffering its sharpest fall since October 2008, before trimming losses. Aluminium fell to its lowest level for a year before recovering to trade higher.