The price of gold is plummeting and mining officials in northern Ontario are taking note.

Gold markets dropped dramatically starting late last week, and that culminated with Monday being the biggest one-day fall in gold prices in 30 years.

'It took me off guard.'—Gary Clark, Ontario Prospectors Association

The head of the Ontario Prospectors Association said he was surprised when he found out about the plummeting price of the precious metal.

"I got a blackberry message from a friend of mine, saying that gold was down $130, so it took me off guard," Garry Clark said.

He said the dropping price of gold hits at a time when exploration dollars are already hard to come by.

And an economics professor at Carleton University in Ottawa said he thinks the drop will continue.

Ian Lee said he predicts a gradual decline in prices as people look to the US economy with increased optimism and start relying less on gold as a hedge against an economic breakdown.

"I think that gold and the US economy have been an almost inverse relationship to one another," he said.

"The more pessimistic people are about the US economy, the more gold went up. But as people start to cautiously become more optimistic, I think it's inevitable that gold will slowly, incrementally decline."

The cost of producing gold may soon meet the price, Lee noted.

"With gold coming down, you're getting very close to the break-even point and mines may start shutting down," he said.

"That will be, I think, a medium term consequence."

But Clark said that's just one opinion, and that the price of gold now could just make mining companies thriftier with production.

"What ends up happening is that they'll try to produce from the higher grade parts of their deposits, so that they're producing the higher grade stuff so that they're making a little more money," Clark said.

"Some [mining companies will put] projects on hold [and] wait for better gold prices."

At market close last night, the price of gold sat at 1,367.80 an ounce.