The price of Gold fell 10% on Monday as the yellow metal fell out of favour with the markets.
A key factor was thought to be the expectation that the US central bank may tighten monetary policy by stopping its Quantitative Easing QE programme.
As the rate of US inflation is likely to fall, it is thought investors have less reason to hold gold as a hedge against any decline in the value of cash investments.
It is also thought that Cyprus's announcement last week that it was planning to sell most of its gold reserves to raise $525million contributed to the fall in the gold price.
Analysts also fear that other weak eurozone economies, such as
Gold fell 9.2% from $1585 to S1395 per oz and may have further to fall if Italy and Spain, follow Cyprus and sell some of their gold stocks with additional supply weakening demand and prices further.
Any further falls could signal a buying opportunity, as inflation is not going to go away any time soon.
