The drop completed the largest two-day fall for gold in Comex history, with analysts describing market conditions as a perfect storm with fundamentals lined up against it.
Investors turn to gold as a hedge against inflation and inflation is holding low enough to take that motivation for buying off the table. Gold is also bought when equity markets are faltering and equities have enjoyed a dramatic recovery since the first of the year as fears of the fiscal cliff abated.
In addition, officials in Cyprus have said the island nation could sell some of its gold reserves to pay for its share of a massive bank bailout. That would flood the market with available gold, which puts pressure on prices.
On Friday, the price of gold fell more than 4 percent with a drop of $79.30 to $1,485.60 per troy ounce in New York.
Gold on Friday fell to 21.3 percent below its August 2011 record of $1,888.70 per ounce. That put the precious metal in a bear market, which is commonly defined as a 20 percent correction from a recent peak.