Gold crashed to a two-year low of under $1,400 (£913) an ounce as panic selling drove the metal’s price further downwards.
The gold market is in liquidation mode, says watchers Photo: ALAMY
Gold is headed for its biggest two-day drop in 30 years, as investors continue to sell their holdings in the metal after it entered a bear market. At one point on Monday, the price dropped more than $30 in minutes.
The latest slide came among a wider sell-off in commodities sparked by China reporting weaker than expected growth, raising doubts about the global economy. Slowing growth means inflation looks less of a threat, so can reduce gold’s appeal as a store of wealth when prices are rising.
But the “safe haven” metal had already entered bear market territory last week, loosely defined as a fall of 20pc or more from its peak. On Friday, the spot gold price dropped below $1,500, down from its record intraday high of $1,921.41 in September 2011.
Ole Hansen, Saxo Bank’s head of commodity strategy, said the market was now in “liquidation mode” as people seek to reduce their exposure to the metal, predicting the price could hit $1,300 before finding any kind of support.
“It’s first and foremost this major technical breach we had last week,” he said. “That really killed it off.