Ask Matt: How bad can the gold crash get?

• Gold was supposed to be a safe haven but has proven to be anything but
• Investors wonder how bad the current gold bear market can get
• The crash in gold is a reminder that commodities are for traders%2C not investors

USA TODAY markets reporter Matt Krantz answers a different reader question every weekday. To submit a question, e-mail Matt at mkrantz@usatoday.com.

Q: How bad can the gold crash get?

A: Investors who thought they couldn't lose money with gold are learning just how wrong they were.

The yellow metal was supposed to be the safe haven protecting investors from the evils of inflation, a sluggish economy and even stock market volatility. But those predictions have proven to be woefully wrong, costing investors who believed them big losses.

So far this year, the SPDR Gold Shares exchange-traded funds, one of the ways to bet on gold, has fallen 25.8%. That's a painful decline for an asset that was billed as being a store of value or safe haven.

Gold is an extremely risky asset that's been associated with rampant volatility and price swings for decades. There have been some vicious downturns in the price of gold, according to data from Winans Investments. There have been six major bear markets in gold since 1980, with an average decline of 40.8%, Winans says. The worst bear market in gold resulted in a crushing 65% decline in value between 1980 and 1982. The second-worst bear market ended up knocking the price of gold down 44%.

Hopefully, gold investors had a plan in place for what they would do if gold, as it's done many times before, turned volatile and started crashing. The current bear market in gold is yet another reminder of why commodities, while billed as being safe when stocks struggle, are anything but safe.