Gold falls 2% over eurozone worries

Gold fell over 2%, approaching this year’s lows and briefly breaking below $1,600 an ounce as fresh concerns over the eurozone debt crisis triggered a technical sell-off.

Bullion, which has largely failed to rally on economic uncertainties this year, was on track for its biggest one-day drop in two months. Yesterday’s tumble cut gold’s yearly gain to just 2%.

Option volatility based on gold exchange-traded funds also spiked and was set for its biggest daily jump in 2012 as investors flocked to the protection of put options against further downside risk in bullion prices.