Gold has tumbled to its lowest level in eight months on speculation that the slumping global economy will dampen demand for commodities. Silver plunged more than 8pc.
Equities in Asia, Europe and the US fell following reports that showed manufacturing in China contracted last month by the most since at least 2005.
Industrial declines in Europe and the UK also deepened. Gold is headed for an annual drop after seven straight yearly gains.
"Marginal gold investors just aren't in the market now," said Frank Lesh, a trader at FuturePath Trading LLC.
"Equities have been a driver for the metals because they're a proxy for the economy. There's not a lot of excess risk capital around to invest in gold."
Gold futures for February delivery fell to $776.80 an ounce while silver futures for March delivery dropped to $9.38 an ounce.
