NEW YORK: Gold slid 2.4 percent, its biggest one-day drop since early December, as fading fears over Portugal’s banking sector and a gain in US equities prompted investors to take profits after bullion’s rally to 3-1/2 month highs last week.

Bullion prices were hit by waves of heavy selling when prices fell below key support at $1,330 and $1,310 an ounce in US gold futures, traders said.

Gold rallied to near $1,350 an ounce last Thursday after questions about the health of Portugal’s top-listed bank sparked worry that a new euro zone banking crisis might be in the offing.

Spot gold was down 2.4 percent at $1,305.50 an ounce by 2:06 p.m. EDT (1806 GMT).

on track for its biggest one-day loss since Dec. 2. Earlier, gold fell to $1,302.90, the lowest level since June 19.

US COMEX gold futures for August delivery settled down $30.70 an ounce at $1,306.70.

The pace of trading was frantic, with volume about 60 percent above its 30-day average, preliminary Reuters data showed.

“Some of the fears about those headlines have diminished, and that has given investors who had been riding on gold’s momentum an excuse to take profits,” said Jeffrey Sica, chief investment officer at Sica Wealth, which manages about $1 billion in client assets.