Gold plunges to two-year low

By Mark Thompson @CNNMoneyInvest April 15, 2013: 2:30 PM ET

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LONDON (CNNMoney)

Gold plunged more than 9% to its lowest level in over two years Monday as a global sell-off in commodities gained steam.

Monday's broad decline was sparked by slowing growth in China. The world's second-biggest economy grew at a 7.7% annual rate in the first quarter of the year, down from 7.9% in the fourth quarter of 2012.

The growth number was higher than the Chinese government's target for 2013 but much weaker than the 8% most economists were expecting.
Other China data also raised doubts about the health of the global economy -- industrial production growth slowed to 8.9% in March against economists' forecasts for about 10%.
The weak China data could mean reduced demand for commodities from the world's second-biggest economy and subdued inflationary pressures. Gold is often viewed as a safe store of value when prices are rising.
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Gold lost more than $140 an ounce to trade well below $1,400, continuing Friday's sharp sell-off, when the precious metal slumped 5%. It is now in bear market territory, having fallen 29% from its record high in September 2011.
Other metals including silver, copper and platinum were also weaker, and oil lost more than 3%.
Mining stocks such as Randgold (GOLD) and Kincross (KGC) and gold-backed exchange traded funds including SPDR Gold Shares (GLD) and Market Vectors Gold Miners (GDX) were all hit hard.
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Investors have been turning their backs on gold recently and pouring money into stocks funds instead as equity markets in the United States have gone on a record-breaking run.
Reports last week that Cyprus may sell gold worth 400 million euros as part of an international rescue added to the exodus, in part because of concerns that other European central banks with much bigger reserves may do the same.
Last week, Goldman Sachs and Deutsche Bank cut their forecasts for the price of gold, citing improving prospects for the U.S. economy, which would reduce the need for further monetary stimulus.