Gold slid below $1,630 an ounce on Monday, mirroring losses in nominally higher risk assets like stocks and crude oil, as concerns that the euro zone debt crisis could ensnare higher-rated countries hurt the single currency and appetite for risk.

Spot gold was down 1 percent at $1,626.30 an ounce at 1302 GMT, while US gold futures for June delivery were down $16.20 an ounce at $1,626.80.     

Losses in the precious metal accelerated as US trading  got underway, taking the metal to a 2-1/2 week low at $1,619.99 an ounce. Prices are down more than 2 percent so far this month.

'The market was very well supported around $1,630 to $1,635 throughout last week, and I think that buying is now over,' Afshin Nabavi, head of trading at MKS Finance, said. 'Next support (is at) $1,600.'     

The euro fell, drawing little support from news at the weekend that the International Monetary Fund would receive a further $430 billion to safeguard economies from the euro zone debt crisis.

Concerns over the euro zone were a key factor pushing gold to record highs last year, but the dollar has since taken over as investors' safe haven of choice. Bad news from the bloc now tends to pressure gold, which falls in line with the euro.

Worries over the region's financial health were apparent in the debt market. Dutch and peripheral euro zone bonds sold off, driving Spanish yields back above 6 percent, as a political crisis in the Netherlands stoked investor fears that euro zone commitments to contain the debt crisis were under threat.

German Bund futures hit record highs and French bonds slipped as investors worried that a potential presidential election win by the French Socialists would compromise the euro zone's commitment to fight its debt crisis.

'(Gold is) basically caught between two opposing factors,' Credit Suisse analyst Tobias Merath said. 'On the one hand, we have US bond yields coming off, which adds some support, but concerns over Europe are capping the upside, because the situation in Europe has the potential to lead to deteriorating liquidity conditions.'     

'As we saw at the end of last year, gold is a hedge against all kinds of crises, but not against a liquidity problem, when people are liquidating assets to raise much-needed cash. They also sell gold in this environment.'      

Physical gold demand remained light in major consumer India even ahead of the Akshaya Tritiya festival on Tuesday, an auspicious day to buy gold. Buying is being hurt by weakness in the rupee, which makes dollar-priced gold more expensive for local buyers. - Reuters