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Gold has biggest drop since 1983

A gold shop in Bangkok. Gold is trading below $1,400 an ounce for the first time since February 2011.

NARONG SANGNAK/European Pressphoto/Agency/file 2010

A gold shop in Bangkok. Gold is trading below $1,400 an ounce for the first time since February 2011.

NEW YORK — Gold had its biggest one-day drop since 1983 on Monday as a selling frenzy that began last week picked up speed.

The price of gold plunged $140.30 to $1,361.10 an ounce, a decline of 9 percent. The metal has dropped $200 an ounce, or nearly 13 percent, in the last two trading days.

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It’s the lowest price since February 2011.

The sell-off started Friday when the government reported a drop in inflation. Investors often buy gold when they’re fearful of rising prices and sell it when they see inflation ebbing.

A proposal last week that Cyprus sell some of its gold reserves to support its banks also spooked investors, leading them to worry that Spain, Italy, and other weak European countries might flood the market just as demand for the metal is weakening.

After the sharp drop last week, the rush of selling started to feed on itself Monday as worried traders hurried to get out of the market.

‘‘This is panic, this it isn’t organized at all,’’ said Phil Streible, a senior commodities broker at RJ O’Brien Futures.

Worries about slowing growth in China also pushed down industrial metals and the price of oil and other commodities.

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