Gold set for worst two-day loss since 1983
By Veronica Brown
LONDON (Reuters) - Gold headed for its biggest two-day drop in 30 years on Monday as funds accelerated their exits from the market, and investors also cut exposure to oil, copper and grain after underwhelming Chinese growth data.
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 percent at the lows as prices breached support at $1,400 per ounce after falling 5.3 percent on Friday.
Oil fared scarcely better, dropping by as much as nearly 3 percent. Other precious metals were caught in the downdraft, with silver briefly dropping 10 percent, 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 percent since last Monday's close, while crude has lost about 3.5 percent.
China's economy grew 7.7 percent in the first quarter, undershooting market expectations for an 8.0 percent expansion and frustrating investor hopes that the world's No. 2 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. Continued...