Gold and silver have been absolutely slaughtered over the last two trading days. In fact, the drop in gold is the largest two-day loss since 1980.

The loss trimmed almost 13.5 percent off the price of gold.

Silver has fared even worse, with the price falling from $27.58 last Thursday all the way down to $22.66 on Monday. This represents a drop of 17.8 percent.

The price declines are shocking and are the biggest I have seen in my 25+ years in the investment business.

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What surprises me most about these declines is that they came at a time when the bullish sentiment had already waned considerably over the previous months.

Last Friday’s Commitment of Traders (COT) report showed that large speculators in gold were net long 119,359 contracts. That is down considerably from the 200,000+ contracts they were long in late November.

The latest COT report for silver shows large speculators were net long 7,915 contracts, down from over 40,000 contracts in early December.

From my experience, it is unusual to see such dramatic drops in price when the sentiment isn’t at a bullish extreme. That applies to all investment vehicles, not just the metals.

Something to keep in mind is that the COT reports come out on Fridays, but they report through Tuesdays. I will be extremely interested in seeing the COT reports for gold and silver this Friday, as I suspect we will see sharp declines in the long positions of large speculators.