Gold prices: Biggest plunge since '80

September 23, 2011: 6:11 PM ET
Gold prices plunged this week on more concerns about the global economy.

Gold prices plunged this week on more concerns about the global economy. Click the chart for more on gold and other commodities.

NEW YORK (CNNMoney) -- Gold prices continued to plunge Friday, despite the market turmoil that often drives investors to the traditional safe haven.

Gold tumbled $101.90, or 5.9%, in regular trading to $1,639.80 an ounce. It's the second straight day of steep declines for the precious metal.

According to the Chicago Mercantile Exchange, Friday marked the first $100 daily price drop since Jan. 22, 1980, when gold plunged $143.50 to $682 the day after having spiked to a record high.

Keith Springer, president of Springer Financial Advisors, said that while gold has benefited from economic uncertainty in recent months and years, it's primarily been a hedge against inflation.

But the growing worries about a global economic slowdown have raised new fears that there could be a period of deflation, or falling prices, in the months ahead.

"People are quickly coming to the realization that gold does very bad in a deflationary environment," he said.

Gold isn't the only commodity to be hit by concerns about the global economy. Silver suffered its worst trading day in decades losing $6.48, or 17.7%, to close at $30.10.

Copper and platinum also both lost nearly 6%. But those metals have far more industrial uses than gold, Springer said, so fears of a recession should drive down those prices. To top of page

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