Updated from 5:50 p.m. ET with CME Group statement raising margins on gold.

NEW YORK ( TheStreet) -- Gold prices plummeted for a historic two-day collapse on Monday as liquidation pressure and long-only funds continued a huge selloff in the yellow metal.

Gold for June delivery on the COMEX dropped $140.30, or 9.3%, to $1,361.10 an ounce. The gold price traded as high as $1,495 and as low as $1,355.30 an ounce. The spot price dropped $124.40 an ounce, according to Kitco's gold index.

Monday marked the largest percentage drop in gold since Feb. 28, 1983, when the price dropped 12.1%, according to Bloomberg data.

"There are an awful lot of people hurt, there's any number of rumors, innuendo, theories as to why this has occurred, but the public was long of gold," Dennis Gartman, editor of The Gartman Letter told TheStreet. "You had a perfect storm of circumstances prevailing: you had technical chart patterns being broken, you had the Cyprus situation, you have the GDP in China, you had the backwardations in crude oil beginning to narrow dramatically . . . you have a new crop of corn that looks like it's going to be sizable being planted."

Gartman said all of this added up to an impending perfect storm of liquidation.

On Friday, prices broke through multiple levels of technical support and many analysts have suggested in interviews that the yellow metal's break below about $1,525 an ounce triggered the two-day free fall the market has seen. Simply, traders continue to test lower bounds to see how far gold will drop before buyers reenter to stabilize prices and reestablish new long positions.

Some investors were looking for a bottom in gold's drop, and some prominent fund managers remained optimistic, despite Monday's tailspin.

"We set up the gold share class at an average cost of around $950 in April 2009 and while it's down from its peak, it's up considerably from our cost," John Reade, partner and gold strategist at Paulson & Co., said in an email. "While gold can be volatile in the short term, and is going through one of its periodic adjustments, we believe the long term trend of increasing demand for gold in lieu of paper is intact."

Central banks, including the Federal Reserve, European Central Bank, Bank of England and Bank of Japan, among others, continue to stress their commitment to monetary easing policies. The Bank of Japan announced on April 4 a massive monetary stimulus program that would include $520 billion in government bond purchases over a 12-month period.

If you liked this article you might like

Gold, Google, SEC Hack - 5 Things You Must Know Before the Market Opens Thursday

Here's the Hottest New Way to Get Rich With Gold

How to Invest in Unstoppable Gold Prices

Novice Trade: Gold ETF

Will Gold Make You 25,000% Richer Like Bitcoin?