Gold price hits two-year low of $1,300 per ounce

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Panic selling spurs major dip in price after weeks of declines.

Gold prices crashed to US$1,300 (£852) per ounce this week in what has been described as the worst two-day performance for the yellow metal since 1983.

The crash marked the end of a decade-long boom for gold, with the slowing Chinese economy and current economic uncertainty in Cyprus said to have played their part in the sudden price decline.

The gold price has been bolstered in recent years due to investors seeking out bullion and coins as alternative forms of investment, while markets such as China have exhibited high demand for luxury goods including jewellery and watches, as well as raw materials used in industry.

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According to London finance paper City AM gold lost more than 12% of its value on Monday and Tuesday and is now down more than 25% from its peak of $1,921 (£1,259), recorded after a summer of gains in September 2011.

Investors are said to have been selling off their gold amid the price dip, which in turn led to silver falling to its lowest price November 2010.

According to Reuters platinum fell to its its weakest price since August last year and palladium hit a three-month low as a result of the weakened gold price.

An analyst at French bank Societe Generale told Reuters that the decline was breathtaking, describing it as "like a knife through butter".

At the time of this story going live, the gold price gained slightly, reaching $1,383.55 ( £907).
 

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