The dramatic slide in the price of gold in the past week has reversed a rise that for more than a decade has been steady and seemingly inexorable. The sudden fall ‑ in which prices plummeted 9 percent, to $1,347.40 an ounce, on Monday, the biggest two-day loss percentage since 1983 ‑ has put goldbugs, who are by definition pessimistic lovers of certainty, into a state of high anxiety. When the commodity of last resort so conspicuously fails to hold its value, the world becomes scarier place.

There  is room, however, for a small celebration: that the Cassandras have been caught short. Their simple remedy of faith in the abiding value of gold as a hedge against an otherwise treacherous, inflated market has been shown to be flawed.

There have always been those who have advocated cashing out and putting everything into gold against the day the stock market crashed, though the number of investors who genuinely found refuge in gold when the market crumbled in 2008 is probably fewer than goldbugs would like to admit. The flight to gold over the past dozen years has attracted a new form of ardent absolutist who suspects the Federal Reserve and the Treasury do not know what they are doing and who believes quantitative easing to be an evil process that invites inflation. These ideologically driven gold stashers are closely related to, indeed are often the same people, as those who advocate the return of the dollar to the gold standard. Such nervous creatures can only be reassured by the ancient lure of gold as a rock-solid reserve. For the past 12 years the rising gold price has appeared to confirm their lack of confidence in Keynesian manipulations of the economy. Since August, however, when gold started to lose its value, something has gone badly wrong.

It really doesn’t matter why gold has lost its glister, whether it is because troubled banks like the Bank of Cyprus are contemplating selling off all their gold to satisfy their country’s creditors while flooding the market in gold, or because of a general readjustment in all commodity prices, gold included. Gold’s fall shows that it is no different from other, more mundane commodities and that its special quality, an unimpeachable promise of retaining its value through the most turbulent of markets, is a myth. The market in gold is tossed by the same concoction of rumor, whimsy and conflicting signals as any other market. The difference is that the practical uses of gold — except as jewelry and in some industrial applications — are strictly limited. One of the few qualities to commend it is that it is easily shaped into ingots for hoarding.

Gold became a commodity that operated as a currency because it is in strictly limited supply. Its scarcity is its principal allure and enhances its value. But its lack of practical value also reduces its versatility as a traded commodity. Why should anyone, other than a hoarder, need gold? John Maynard Keynes saw little merit in the ritual of digging up gold in South Africa and shipping it for perpetual safekeeping in Fort Knox. He observed that such obscure transactions provided a small amount of employment but did not otherwise help an economy grow. Gold’s scarcity continues to commend it as a safe haven in an uncertain market. But for how much longer? The market has been heading upward for so long, it has come as a surprise to some goldbugs that the price of their favorite refuge can go down. Their faith in gold as an absolute bedrock, expressed to disbelievers with an arrogant air of conviction and complacency, is under challenge.