Gold prices have been sent tumbling to a two-year low by weaker-than-expected growth in China and receding fears over inflation.
Gold, traditionally seen as a safe haven for investors, dipped below the 1,400 US dollars per ounce mark for the first time since March 2011, and was down almost 10% on Friday's price.
The sell-off prompted speculation gold has lost its allure for investors, who typically buy gold to insure against inflation-eroding cash investments. Any indication prices are not rising prompts investors to sell gold.
A fall of 20% or more over two months would signal a technical bear market.
Traders said the precious metal was dragged lower by speculation the US Federal Reserve may call time on its quantitative easing programme. Markets were also shaken by fears Spain, Italy and other weak economies will follow Cyprus, which is expected to sell off some of its gold reserves to support its banks.
Colin Cieszynski, senior market analyst at CMC Markets, said: "The reaction to the possibility that Cyprus may be forced to sell gold to raise cash appears very reminiscent of the action in the 1990s bear market when countries like Argentina sold gold to raise money."
Miners dragged the FTSE 100 Index lower, with shares in gold and silver miner Fresnillo plunging more than 15%. The precious metal extended its losses from Friday, when the US government said wholesale prices fell in March by the most in 10 months.
The price of oil dropped to near 89 US dollars a barrel, its lowest level since mid-December, dragged lower by fears of slowing global demand for oil.
The Chinese government said growth slowed to 7.7% in the first quarter from 7.9% in the final quarter of last year. Growth has been expected to speed up after several quarters of decline. China is the world's second-biggest buyer of gold behind India.
Shaun Port, chief investment officer at Nutmeg.com, said gold no longer trades as a safe haven asset. He added: "With global growth recovering, investors are unwinding investments in 'fear' assets, such as gold, in favour of 'hope' assets, such as equities."