‘Get me out of here’: China growth fears see gold prices take biggest hit in 30 years

The precious metal slid further into bear territory, dropping more than $30 in a matter of minutes at one point.

Losses widened to more than 6 per cent at the lows as prices breached support at $1,400 per ounce after falling 5.3 per cent on Friday.

Oil fared scarcely better, dropping by as much as nearly 3 per cent.

Other precious metals were caught in the downdraft, with silver briefly dropping 10 per cent, and industrial metals plummeted, with copper hitting its lowest in over a year.

In the grains market, wheat, corn and soybeans fell.

Both oil and gold have been under substantial selling pressure. Bullion has come off worst, shedding around 9.5 per cent since last Monday’s close, while crude has lost about 3.5 per cent.

China’s economy grew 7.7 per cent in the first quarter, undershooting market expectations for an 8 per cent expansion and frustrating investor hopes that the world’s second biggest economy would rebound after posting its weakest growth in 13 years in 2012.

“If you want to be worried about China, there’s plenty to keep you awake at night,” said Sean Corrigan, chief investment strategist at Diapason Commodities Management in Switzerland.

Gold was already under pressure from a variety of factors, including a proposed sale of Cypriot gold holdings, and more fund-based investors headed for the exits on Monday.

Spot gold hit a two-year low at $1,384.69 an ounce.

“We have seen massive liquidation from all quarters. This is a market that has only got one thing on its mind... get me out,” said David Govett, head of precious metals at Marex Spectron in London.

In gold, “what we now see is panic selling, perhaps triggered by the Fed’s stimulus view. The Fed has given the signal that there’s a possibility to reduce QE (quantitative easing), and that took a lot of trust out of gold,” said Dominic Schnider, an analyst at UBS Wealth Management.

“And people recognise that an environment where you have no inflation is a powerful driver to get out of the metal.”