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Meanwhile, in its first update since 2009 the People’s Bank of China said it owns about 1,658 metric tonnes of gold, which indicates it purchases approximately 100 tonnes of the metal each year.

Monday marked the sixth straight day of decline for gold, which took a hit last week after Federal Reserve Chair Janet Yellen said the U.S. central bank is on course to raise interest rates this year if the U.S. economy expands as expected.

Gold suffered a big jolt and plunged sharply to touch a two-year low at the bullion hub in Mumbai as panic-stricken investors and speculators went on a selling spree sparked by global liquidation worries.

Gold earlier breached the key support level as the dollar gained following Federal Reserve Chair Janet Yellen’s comment that the central bank is on course to raise interest rates if the US economy continues to expand.

Gold’s slide has helped wipe out half the gains from the last decade’s historic Bull Run, taking prices back to a key chart level and threatening a break towards $1,000 an ounce.

This comes after the US Federal Reserve chair Janet Yellen indicated that interest rates could be hiked this year. That triggered a renewed bout of selling in commodities markets around the world, with precious metals, including gold, hit hard. This makes the dollar more...

Gold prices fell to as low as $1,088.05 an ounce on 20 July – the weakest level since March 2010 – led by a selling spree in China and expectations of an increase in US interest rates.

At the same time, expectations of higher rates are sending the US dollar higher, further pressuring gold, which is priced in the US currency and becomes more expensive to foreign buyers when the buck climbs.

In April 2013, when gold price fell from the peak above US$1,800 to lower than US$1,600, it triggered a “gold rush” by Chinese housewives with cash to spare.