Gold closed below its 200-day moving average of $1,618 an ounce. The 200-day moving average has been tested only seven times in the last three years and most investors and traders see it as a danger zone for gold. There is "no quick rescue in sight for now," said George Gero, senior vice president at RBC Capital Markets. "These selloffs usually do not end right away." Gero said gold's losses were accelerated as traders and fund managers had to trade the metal in for cash to cover losses elsewhere as bad headlines continued to mount. Stop losses -- in which traders are forced to sell gold at a certain level to protect profits -- were also activated. David Banister, chief investment strategist at TheMarketTrendForecast.com, was recommending that investors buy gold long into this selloff but with very tight stops at $1,600, meant that when gold broke below that level they most likely dumped those long positions, which could have further accelerated the sell-off.