SPDR Gold Trust said its holdings fell 2.2 pct, in its biggest one-day drop in seven months, as gold futures slid more than $100 on strong U.S. economic data and ahead of a key Federal Reserve meeting.
The holdings of the world's largest gold-backed exchange-traded fund dropped to 1,232.3 tonnes by the end of Wednesday's trading session from 1,259.57 tonnes on Tuesday.
The drop in holdings came as selling spiraled out of control with money managers competing to liquidate positions in COMEX futures, which experienced their biggest single-day dollar loss since 1980.
Gold futures came under pressure as a report showed strong rise in July orders for U.S. durable goods, coupled with expectations of another round of quantitative easing at the Federal Reserve meeting at Jackson Hole, Wyoming.
Meanwhile, the CME Group announced a 27 percent hike in maintenance margin, its biggest increase in over two and a half years, on trading COMEX 100-ounce gold futures.
The Shanghai Gold Exchange also raised margin requirements for its gold forward contracts for the second time in August to 12 percent, effective Friday, in an attempt to curb excessive risk-taking following the rapid rally in gold prices.
U.S. gold futures for December delivery settled down $104 at $1,757.30 an ounce, the biggest price drop of the continuous, front-month contract since Jan. 22, 1980, when it tumbled almost $150, according to Reuters data.
On a percentage basis, it was the steepest fall since December 2008, during the financial crisis.