The local gold price dropped VND1.8-2.1 million ($81.35) a tael Tuesday morning, hitting its record low since July 9, 2011,  following a global trend.

However local gold bullion was still some VND6-6.2 million more expensive than its international counterpart, which has seen its sharpest plunge in the last 33 years.

At 8.45 am, the price of Saigon Jewelry Co. (SJC) gold bullion in Ho Chi Minh City was quoted at VND38.8 million a tael and VND39.7 million a tael for bid and ask, down VND1.8 million and VND2.1 million day-on-day, respectively.

The price dropped some VND2.35 million a tael compared to the closing price of the previous week. (1 tael = 1.2 ounces)

The SJC gold price in Hanoi on Tuesday morning was listed at VND 38.8 million a tael and VND39.72 million a tael for bid and ask, respectively.

Meanwhile, the world gold price has seen its most dramatic drop, plummeting to a rate equivalent to about VND33.7 million a tael due to the freefall last week.

This plunge was caused by a massive sell-off by investors concerned about the diminishing attractiveness of the precious metal, putting an end to its 12-year consecutive gains.

The opening price on the Asian market on Tuesday morning continued to fall sharply to around $1,335 an ounce as the sell-offs continued.

Investors continue to flee the gold market as gold prices continue to decline.

At 9:08 am local time this morning, spot gold stood at $ 1329.4 an ounce, down more than $23 an ounce compared to that in the early hours of the morning.

The sell-off took place in the context of the global economy showing signs of recovery, making the precious metal less attractive as a profitable investment channel.

Meanwhile, China's lower-than-forecast economic growth figures in the first quarter also affected market sentiment. Figures published yesterday by the National Bureau of Statistics of China, said the country’s GDP was up 7.7 percent in the first quarter compared to the same period last year, 0.3 percent lower than the forecast of experts and lower than the 7.9 percent rate in Q4/2012.

Since gold prices have been in freefall, analysts are also wary when giving out gold price forecasts. Goldman Sachs last week warned that investors should sell gold and that Brent oil prices will continue to face pressure due to European weakness.

The freefall has resulted in a $1 billion loss for gold investor-billionaire John Paulson in the past two trading days, as gold lost 13 percent of its value.

In early 2013, Paulson invested a total of approximately $ 9.5 billion in his hedge funds. The proportion of investments related to gold was up to 85 percent.

According to Bloomberg data, the total assets of the tycoon’s hedge funds have fallen by $1.52 billion so far this year.