NEW YORK (AP) — Gold futures briefly plunged to their lowest level in 21 months Friday as a stronger dollar and plunging world stock markets led investors to sell commodities to offset massive losses in equities. The metal recovered much of its losses later in the day, but prices are still down about 20 percent since the start of the month. That huge decline has raised questions about whether gold has given up its long-held claim as a safe-haven asset during times of economic crisis. "Gold has not been benefiting from the flight to quality like we would have thought," said Matt Zeman, head trader at LaSalle Futures in Chicago. People aren't stepping up and buying it. They're most comfortable in cash and Treasurys. Everything else is suffering on worries about the global economy." Gold for December delivery fell $33.70 earlier in the day to $681 an ounce on the New York Mercantile Exchange, the lowest level for that contract since Jan. 11, 2007. Later, prices clawed back up to trade at $708.70, down $6. The recovery came as U.S. stocks pared some of their early heavy losses. Still, gold has plummeted about 30 percent since surging to an all-time trading high of $1,033.39 on March 17, confounding some investors who have been predicting the metal could rise as much as $2,000. Gold has traditionally been seen as safe place to invest during rough times because its known for holding its value. But as global recession worries weigh down financial markets across the globe, hedge funds and other large institutional investors have been cashing in commodities to cover bad bets on stocks and other assets. "A lot of these funds still have profitable positions in gold, so they're going to sell whatever they can to raise cash," said Jon Nadler, analyst with Kitco Bullion Dealers Montreal. He noted that the likelihood of a recession means consumers will be buying less gold jewelry, potentially adding to the downward momentum on prices. Other precious metals also fell sharply Friday. December silver lost 58.5 cents to $8.915 an ounce on the Nymex, while December copper declined 10.95 cents to $1.695 a pound. Despite gold's decline, not all investors are giving up on it. Jeffrey Nichols, managing director of American Precious Metals Advisors, said he still believes gold has "extremely bullish longer-term prospects." He noted that gold is off about 12 percent since the start of the year — far less than most other asset classes. Gold's drop doesn't "mean that gold is suddenly no longer a safe haven in turbulent times," Nichols said in a note. "But it does demonstrate that at times of panic even the yellow metal can fall victim to developments in other asset markets."

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