Gold price drops 8 percent

Investors dumped commodities and stocks on Monday in a broad selloff that gave gold its worst two-day loss in 30 years after weak demand figures from China fanned concerns the world economy is stumbling, Reuters has reported.

Gold dragged other metals lower as its price plunged to a more than two-year low. Brent crude fell towards $100 a barrel, while on Wall Street stocks dropped more than 2 percent for the S&P 500's worst day since November 7.

Copper fell to its lowest in 1-1/2 years. Three-month copper on the London Metal Exchange fell to $7,085 a metric ton (1.1023 tons) in intraday trade, its lowest since October 2011.

Silver lost 12 percent at $22.71 an ounce, having fallen as low as $22.56.

Spot gold dropped as much as 9 percent on Monday alone, falling as low as $1,336.04 an ounce. In the last two sessions gold has fallen over 13 percent, for the worst two days since late February 1983. Gold was recently at $1,346.26.

Strategists have cited various reasons for gold's slump, including plans by Cyprus to sell excess gold reserves and feared selling from other central banks.

- The pressure from the proposed sale of Cyprus gold is one of the factors, and once one of them starts, they all run from the hen house - said Robert Richardson, senior account executive and trading officer at Canadian broker-dealer W.D. Latimer Co. Ltd.

China's recovery unexpectedly stumbled in the first three months of 2013, as it reported its annual growth rate eased to 7.7 percent from 7.9 percent in the final quarter of last year. Economists had forecast 8 percent growth.

Industrial output in China in March also undershot expectations and added to investor sensitivity after recent disappointing economic data out of the United States.

A U.S. regional manufacturing report on Monday showed the pace of growth slowed, the latest data to suggest the world's biggest economy lost some steam heading into the second quarter.

- China makes up 40 percent of demand for base metals and all the growth in demand for oil is coming from the developing world, so to see weakness in China is bad for commodities generally - said Nic Brown, head of commodities research at Natixis in London.

Last week Cyprus revealed it would sell around 400 million euros worth of gold to help shore up its ailing finances and the move has sparked suggestions that larger countries in the region could use the move to cash in on some huge jumps gold has seen over the last decade.