Dollar strength triggered fund selling in the precious metals markets on Tuesday in Europe, with gold shedding just over three percent and silver nearly eight percent to hit joint four-week lows.
The sharp drop hit platinum group metals to a lesser extent, but prevented platinum from regaining a fresh 24-year high hit earlier in the day.
Gold got off to a weak start when the European market opened after a long weekend as investors began to sell positions they had acquired as an insurance against potential security troubles over the Easter break.
But the selling picked up pace when US retail data for March came in much stronger than expected, boosting the dollar and denting gold's appeal to holders of other currencies.
Spot gold was quoted at $406.75/407.25 an ounce by 1440 GMT, sharply down from New York's late quote on Monday of $419.50/420.00. Prices fell as low as $405.70, the weakest since mid-March.
"There is some quite good physical (buying) coming in at the lower numbers," said Simon Weeks, bullion director with ScotiaMocatta London.
"I think we've moved from a $415-25 range to a $405-415, but you can't rule out further losses simply because the funds are heavily involved in the market at the moment and when they all hit the exit door, it can get a little ugly."
Funds continued to add to their long positions last week on the New York COMEX gold futures market, taking it to the highest level in more than 10 years.
Analysts noted that a spate of kidnaps in Iraq and ongoing global security concerns would nevertheless help stem massive liquidation of gold and helped to justify the large long positions held in the market.
Silver finally came a cropper after a significant price rally since the start of the year, that had boosted prices by some 40 percent to reach $8.43 an ounce in early April - their highest in 17 years.
Analysts and traders had issued repeated warnings that the rise was unsustainable and making silver vulnerable to a sharp downward correction.
Spot silver skidded as low as $7.37 on Tuesday and were last quoted just above there at $7.39/7.42 from $8.00/8.02.
"Silver has done its usual. It's like growing a tree, it takes 20 years to build up and two minutes to cut down - silver always has the potential to have this kind of a move," Weeks said.
Platinum was unable to regain earlier new 24-year highs at $942 an ounce and dropped back $928.00/933.00 a troy ounce, lower than New York's late quote on Monday of $937.00/942.00.
Fund buying took prices higher while European markets were shut for Easter, traders said.
The price of platinum, used mainly in jewellery and auto-catalysts, has reached levels not seen since early 1980 as demand outstrips supply.
Analysts were now looking for the metal to target $950 an ounce, ahead of $1,000. Platinum peaked at $1,047.50 on March 5, 1980, before subsiding back down to $500-$600 in April 1980.
Palladium barely moved throughout the European day, sticking close to 19-month highs, as it basked in the aftermath of news that Belgian metals group Umicore SA said it had developed technology allowing the metal to be used in diesel emission control systems.
Spot palladium was trading at $328.00/333.00 an ounce, down a little from New York's previous $332.00/337.00 and off an earlier peak at $334.00.
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