SAN FRANCISCO (MarketWatch) — Gold futures on Monday suffered their biggest one-day decline since the 1980s, as the metal extended its dive into a second straight session and pushed further into bear-market territory.

The broader metals complex also dropped, with silver down 11% for its lowest settlement in more than two years after disappointing Chinese data fed worries over industrial metals demand.

Mining firms were hard hit by the selloff, with shares of Freeport-McMoRan Copper & Gold Inc. FCX, +0.89% dropping 8.2% and Newmont Mining Corp. NEM, -1.96% down 5.8%, as resource stocks led the S&P 500 index SPX, -0.83% lower Monday afternoon.

Gold for June delivery GCM23, tumbled $140.30, or 9.3%, to $1,361.10 an ounce on the Comex division of the New York Mercantile Exchange. Prices dropped to as low as $1,355.30.

The closing level was the lowest for a most-active contract since February 2011, according to FactSet data.

Prices saw their biggest one-day percentage drop since February 1983. Gold’s one-day dollar drop was the biggest since January 1980 and the second largest in its history.

Monday’s loss comes on top of Friday’s selloff, when gold lost $63.50, or 4.1%, to $1,501.40 an ounce. Friday’s settlement price marked a 20.5% drop for the most-active contract from the record settlement of $1,888.70 an ounce reached on Aug. 22, 2011.

Silver for May delivery US:SIK3 dropped $2.97, or 11%, to end at $23.36 an ounce. Based on most-active contracts, silver futures closed at their lowest since October of 2010, according to FactSet.

With the gold and silver selloff continuing for a second day, “investors would be wise to hold their positions and wait it out,” said David Morgan, publisher of investment newsletter the Morgan Report, adding that these technical selloffs usually last three or four days.

“Institutional investors will continue to unload their positions until a bottom is achieved,” he said, but the fundamentals for both gold and silver are “still strong” against a backdrop of financial woes in Cyprus, geopolitical tensions surrounding North Korea, “and the silver retail market is showing high premiums with shipping delays.”

As for what investors should do next, analysts urged caution. Julian Phillips, contributor to and founder of GoldForecaster.com said he would not sell at this point, “otherwise you may be selling at the bottom.”

“Wait until the fall has slowed and built a base showing it is turning,” he said. “Panic selling on the back of a bear raid is a traditional sign of the bottom. I personally would make myself ready to buy.”

Finding blame

Traders and analysts have cited numerous reasons for gold’s breakdown.

Sentiment in gold has suffered due to recent cuts to price forecasts for the precious metal and outflows from gold exchange-traded products. Among those calls, Goldman Sachs last week lowered its average gold-price forecast for 2013 to $1,545 an ounce, a level the metal took out Friday.

Stan Shamu, market strategist at IG Markets in Melbourne, in a note to investors said gold’s tumble has largely been blamed on potential central-bank sales to shore up fiscal shortfalls. “This is after ECB President Mario Draghi put pressure on Cyprus to sell its excess gold reserves to help fund the country’s bailout and plug a €6 billion gap. Although Cyprus is yet to decide how it’ll fund the gap, these comments have rattled investors and caused the selloff.”

Analysts have also cited declines in holdings of the metal in exchange-traded funds. Holdings in the SPDR Gold Trust GLD, -0.84% were at 37.3 million ounces as of Friday, down from 39.1 million on April 1. Shares of the ETF were down 8.3% Monday afternoon. The iShares Gold Trust IAU, -0.90% fell 8.4%.

Others noted heavy sell orders for gold that went through New York’s Comex market on Friday. Ross Norman, chief executive officer of Sharps Pixley, said some 400 metric tons were pushed through by sellers last Friday, with another 70 metric tons coming through in Asia and Europe trading.

James Carrillo, senior portfolio adviser for precious-metals investment firm Swiss America Trading Corp. said he doesn’t believe long-term fundamentals for gold have changed. This is “just a seasonally weak time of year and we are witnessing a panic sell.”

Silver and copper take hits, too

Copper prices followed silver’s cue, with May copper HGK23, losing almost 8 cents, or 2.3%, to $3.27 a pound.

Both metals took hits after China, the world’s second-largest economy, posted quarterly growth and monthly industrial-production figures that missed analyst expectations.

China’s gross domestic product in the January-March quarter rose 7.7%, slower than growth of 7.9% in the fourth quarter, and below expectations for an 8% gain in separate surveys from Dow Jones Newswires and Reuters.

Gold careens into bear territory

Among the other Chinese data, March industrial production increased 8.9% from the year-earlier period, missing the Dow Jones Newswires forecast for a 10% gain.

On a technical basis, silver has a key long-term support at $19.76. As long as silver trades above $19.76, the chances of a rise to $35 are high over the coming months, said Chintan Karnani, an independent bullion analyst in New Delhi.

Oil prices were also tumbling on Monday as the weak China data deepened worries about demand for the commodity.

Elsewhere in the metals complex Monday, July platinum futures US:PLN3 slumped $71.10, or 4.8%, to $1,424.80 an ounce. Based on the most-active contracts, prices saw their biggest one-day percentage drop since September 2011.

Palladium for June delivery US:PAM3 lost $42.10, or 5.9%, to end at $667 an ounce.