(REUTERS) -- The second-biggest slump in gold prices since the financial crisis has rattled bullion bulls, as implied volatility in the gold options market is subdued, suggesting the bullion is seeking to find a new range.

The precious metal on Wednesday slid below its 200-day moving average for the first time in three years. With that, more investors are questioning gold remains a safe haven.

The Chicago Board Option Exchange's Gold ETF Volatility Index .GVZ, often referred to as the Gold VIX, on Thursday fell 4.72 percent to 27.28. It peaked at 43.51 on September 23. The index is based on SPDR Gold Trust options, which trade off the world's biggest exchange-traded gold fund.

The GVZ -- which measures the market's expectations of 30-day volatility in gold put and call prices -- remains far lower than in August or September, when gold peaked and then tumbled.

Gold implied volatility is relatively low considering where it has been since September when it spiked up as investors were worried about the European debt crisis, said Bill Luby, a private investor in San Francisco who writes the VIX and More blog.

The implied volatility of crude oil, gold and the CBOE Volatility Index .VIX have been falling over the last two weeks even as U.S. stocks have declined. So gold has not been working as a hedge, Luby said.

The reasons for the low volatility is that the market is coming into a potentially slower holiday season and there is not as much fear in the gold market as there was in mid-September, said Steve Place, a founder of options analytics firm investingwithoptions in Mobile, Alabama.

HESITANT ON CALLS

People are playing gold as a trade this time and are not using gold as a risk-off position or a currency hedge, said Joe Cusick, senior market analyst at Chicago-based online brokerage firm optionsXpress. The overall trend has definitely shifted into the bearish camp. Instead of buying the underlining shares of these miner ETFs, traders are using call options as a proxy to capture near-term upside.

On the put side, volume in the GLD on Wednesday was the largest since September 23. About 324,000 puts and 280,000 calls changed hands in the GLD, nearly triple the average daily turnover, according to options analytics firm Trade alert.

The put traffic consisted of spreads, the rolling of positions before December expiration on Friday and a large straddle sale, that looked for GLD prices to be range-bound by January expiration.

Gold had attracted a lot of speculative momentum traders as it went up since late 2008, Luby said.

Past price corrections often triggered buying of out-of-the-money calls on gold-related products on the expectations that prices would relentlessly march higher.

This time gold came down so severely that I think that people are reassessing as to what their proper holdings should be in gold and may have stopped some of the speculators who bought call options without thinking, said TD Ameritrade chief derivatives strategist J.J. Kinahan.

Now those who are trading gold are more serious traders using all different strategies rather than just buying out-of-the-money calls in gold products, Kinahan said.