The price of gold fell 4% to as low as $1,088.05 (£697) an ounce in Asian trade, its lowest price since March 2010, after China indicated that its gold reserves were at half the level expected.

The price of platinum also fell 5% to its weakest since the global financial crisis.

According to Gnanasekar Thiagarajan, director of Commtrendz Risk Management, the drop in price is a sign of a large fund selling its gold holdings: “This kind of sharp drop during early Asian hours is a strong indication that a big fund is selling their holdings of gold.”

Investors generally buy gold during times of uncertainty, but the bullion’s safe-haven status has also taken a fresh knock from mounting expectations of a US rate hike.

“The market looks very technically weak and the biggest buyer of all, China, is now selling gold as opposed to buying it on price dips. That’s a recipe for weaker prices,” said Victor Thianpiriya, an analyst at ANZ Bank in Singapore.