Analysts blamed on Tuesday the April 12 decision of Cyprus to sell the bulk of its hold for the bear market on the yellow metal. For long considered a safe haven, gold logged its biggest one-day percentage drop in three decades.

The drop by $140.40 or 9.4 per cent of prices to $1,360.60 per ounce of gold futures for April delivery on Monday at the Comex division of the New York Mercantile Exchange was also a two-year low.

The yellow metal's prices, since Thursday, had gone down by over $203 an ounce, a record decline since futures trading of gold started in the U.S. in 1974.

These developments end the bull market enjoyed by gold in the past decade. But weeks before the yellow haven was declared official on a bear market, some bullish analysts, such as Goldman Sachs, had been negative on gold.

Besides Cyprus decision to sell the bulk of its gold to meet European Union bailout conditions, investor worries were worsened on Monday with the report that China logged a worse-than-expected economic data. China is one of the largest physical buyers of the yellow metal, once considered a safe hedge against inflation.

As investors panicked and sold their gold stocks, leading to a liquidation mode in the gold market, Saxo Bank head of Commodity Strategy Ole Hansen predicted the yellow metal's prices with dip further to $1,300 before it would find any kind of support from the market.

Mr Hansen said investors in gold exchange-traded funds are dumping their shares and hedge funds are short-selling the commodity.

"Sentiment is really frail and, interestingly enough, this is happening over a few weeks when we are seeing economic data that could, in other circumstances, be supportive to gold," The Telegraph quoted Mr Hansen.

Following the dumping of gold, Barrick Gold (TSX: ABX) shares tumbled down 10.68 per cent by 2.45 to $20.49 at the Toronto Stock Exchange after it lost 15 per cent of value last week. Goldcorp (TSX: G) suffered a 5 per cent decline in shareprices at $28.54.

The Sydney Morning Herald pointed out the gold correction is both good and bad news because while it trumpets the return of the Almighty Dollar and would be good for global inflation since all commodities would deflate, it would also mean that the U.S. would again be burdened with exorbitant privilege which would slow its recover.

For Australia, since gold is the country's third-largest export good, it means the country's terms of trade would likely take another major hit.

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