Gold prices have entered bear market territory for the first time in over a year, with the precious metal tumbling nearly 22 percent from its record highs in 2011.

The metal, which has long been considered a safe haven investment by individual investors and fund managers, suffered its third consecutive drop on Friday, drastically down from the September 2011 peak of $1,920.30 per ounce.

Gold fell 4.9 percent in the week to a low of $1,493.35, breaching a key support level of $1,521. It traded as low as $1,397 on spot markets Monday, the lowest level since at least March 2011.

While the immediate future of gold as a stable investment option remains in question, its weakness over the past few days was mainly attributed to the troubled baby of the eurozone, Cyprus.

Cyprus must sell its excess gold reserves to raise €400m ($525m/£342m) to finance part of its EU-IMF bailout fund, according to a draft plan on Cypriot financing needs prepared by the European Commission.

A meeting of the Eurogroup of European Union finance ministers is underway in Dublin, where member states are likely to approve up to £10bn in loans to Cyprus.

More than Cyprus, the bullion market is concerned that other heavily indebted countries such as Portugal, Italy and Spain may decide to sell their gold reserves.

"If Cyprus can break the gold market, then (there are) many reasons to be worried, with Slovenia, Hungary, Portugal, Spain and Italy in line," Milko Markov, an investment analyst at S.K. Hart Management told Reuters.

"It is a make-or-break moment for gold ... if the market can't handle the reallocation and Cyprus, then there is really a need for a bear market."

Other factors that contributed to gold's weakness included weak retail sales figures from the US as well as the continued outflow from exchange-traded gold funds.

Adding to the concerns is the trend in bullion futures. The US gold futures for June delivery hit $1,491.40 an ounce, down 3.9 percent, before recovering to $1,503.80. The fall was across the spectrum with most commodities under pressure, while silver dropped the most, 4.5 percent. Brent crude hit an eighth-month low.