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) --

Gold prices

continued to fall Monday after China slashed growth estimates to an eight-year low of 7.5%.

Gold prices fell 3.5% last week, putting in the largest one-week decline since the week of December 18. The slide was continuing Monday. Gold for April delivery was falling $8.40 to $1,701.40 an ounce at the Comex division of the New York Mercantile Exchange. The

gold price

traded as high as $1,718 and as low as $1,694.40 an ounce, while the spot price was losing $9.20, according to Kitco's gold index.

Silver prices

were sinking 83 cents to $33.69 an ounce while the

U.S. dollar index

was falling 0.13% at $79.301.

Investors were selling equities after China reduced its economic growth target for the year and a gauge of business activity in the eurozone declined. Chinese Premier Wen Jiabao slashed China's 2012 economic growth target to an eight-year low of 7.5%, citing high inflation and a tepid worldwide economic outlook. China has been among the fastest-growing economies in recent years, outstripping the performance of developed nations such as the U.S. and U.K.

Meanwhile, the private-sector HSBC China services index showed that the country's services sector progressed at its fastest pace in four months last month, but was markedly below its long-term trend. The private-sector HSBC China Services Purchasing Managers' Index rose to a seasonally adjusted 53.9 in February from 52.5 in January.

"Proving for the nth time that what happens in China is a pivotal impact factor to the commodities' space, the most recent development in that country sent base and precious metals prices, along with most global equity markets, lower overnight," said Jon Nadler, senior metals analyst with Kitco Metals. "The first forecast for lower economic growth in eight years for that country derailed many an asset as the new trading week commenced. Gold and silver were clearly not immune to the negative news."

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In Europe, Markit Economics said that its composite purchasing managers' index for the continent fell to 49.3 in February from the earlier estimate of 49.7 and from the previous month's reading of 50.4. The below-50 reading indicates business activity contracted last month.

Vote: Where will gold prices finish in 2012?

In U.S. economic news, data on factory orders and non-manufacturing activity came in better-than expected. January factory orders fell 1% according to the Census Bureau. A slide of 1.6% was expected by analysts surveyed by

Thomson Reuters.

Meanwhile December's originally reported 1.1% jump in factory orders was upwardly revised to a 1.4% gain.

The Institute for Supply Management's non-manufacturing index showed a much better than expected reading of 57.3 for February, up from 56.8 in January. Analysts polled by

Thomson Reuters

were forecasting a reading of 56 for last month.

A report on global gold production has raised fears that supplies may be dwindling. A report from bullion dealer GoldCore noted that of the world's four largest gold producers, only China achieved gains. Australia, the U.S. and South Africa saw declines.

This further suggest the possibility of peak gold production," said GoldCore. "Chinese gold is used in China to meet the rapidly growing demand for gold jewellery and coins and bars as stores of value." As a result, the balance between supply and demand is likely toremain tight.

Mining stocks

were following prices lower on Monday. Among the biggest losers were

Great Panther Silver

(GPL) - Get Great Panther Mining Limited Report

, shedding 4.6% to $2.46, and


(FCX) - Get Freeport-McMoRan, Inc. Report

, falling 4.5% to $40.13.

Eldorado Gold

(EGO) - Get Eldorado Gold Corporation Report

was losing 4.4% to $14.24 and

Silver Wheaton


was down 3.9% to $36.10.

-- Written by Ross Tucker in New York.

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