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As a slump in global markets continues unabated, investors are selling gold to meet liquidity needs by cashing in on the haven’s previous gains.

Bullion tumbled below US$1,600 an ounce Thursday, a dramatic U-turn for prices that reached their highest level since 2012 at the start of this week. Indeed, its earlier advance due to its status as a haven during market turmoil may be why gold is being dragged down now.

“Liquidity needs will be a key driver in the short term,” said Suki Cooper, precious metals analyst at Standard Chartered Plc. “Gold is one of the few assets that has outperformed, enabling investors to take profit rather than consolidate losses.”

Traders say that the unrelenting rout in global equities is triggering margin calls, spurring investors to look for opportunities where they can cash in. Additionally, strength in the dollar is also curbing the precious metal’s appeal as a haven for holders of other currencies.