Gold has slumped nearly 12 percent in the fourth quarter, suffering its second-worst quarter in 18 years as a host of catalysts pummel the yellow metal.
The most obvious factor is the decline of fear in the marketplace. Stocks have surged following Donald Trump's surprise victory, and market-based measures of fear like the CBOE volatility index have tumbled.
Such a change in sentiment generally lessens investment interest in gold, often considered a "safe haven" asset. And indeed, beyond the psychological aspects, gold tends to enjoy an inverse relationship with the S&P 500.
Meanwhile, as risk appetites have increased, the fixed income market has plummeted, leading to a massive surge in bond yields. Since gold is (at best) a nonyielding asset, higher rates in the bond market make gold a less attractive holding by comparison. And with the Fed widely expected to raise short-term rate targets on Wednesday, this move doesn't look to be reversing any time soon.
With yields on the upswing, the value of the U.S. dollar has risen dramatically — another classic bearish factor for commodities in general and gold in particular.
As a result of all these macro problems, gold has just finished its fifth-straight losing week and is on track for its worst quarter since the second quarter of 2013, which played host to a devilish drop for the metal. Prior to that, gold last fell by more than 12 percent in the final quarter of 1997.
Even after its recent drop, gold is still up on the year, thanks to the big rise it enjoyed through the Fourth of July.
Going forward, strategists don't see any reason to get particularly excited about the investment.
"We think it's a good diversifier, but we're not looking for a tremendous rally within gold over the next several years," Stifel Nicolaus portfolio manager Chad Morganlander said Friday on CNBC's "Power Lunch."
At this point, Morganlander would recommend a 5 percent allocation to gold in one's portfolio.