LONDON (Reuters) - Gold was set for its biggest three-day loss in 28 years on Monday, as investors fled commodity markets in a scramble to secure cash in the face of mounting fear over the impact of a potential Greek debt default on the rest of the euro zone. European policymakers began working on new ways to stop fallout from Greeces near-bankruptcy from inflicting more damage on the world economy after stinging criticism for failing to stem the debt crisis. European equities fell, while industrial commodities such as crude oil and base metals bore the brunt of investor desire for cash in the face of mounting uncertainty. In the last three days alone, gold has fallen by nearly 10 per cent in its largest three-day slide since February 1983 and implied volatility has risen to a 2-1/2 year high. Spot gold was last down 3.0 per cent on the day at $1,621.49 an ounce by 4:03 a.m. ET, having fallen earlier by as much as 7.4 per cent, putting the difference between the intraday high and low at $128.40, the largest daily price swing on record. It shows you that at times of extreme stress, there is not a suitable substitute to liquidity and although gold is liquid by metal standards, in comparison to treasuries, when you get this kind of flight to cash, then it really is cash that counts and that means US dollars, said Credit Suisse analyst Tom Kendall. The markets are going to continue to react this week to the political situation within Europe and I dont see any quick resolution or stimulus coming to the markets. After a weekend of being told by the United States, China and other countries that they must get more aggressive in their crisis response. , European officials focused on ways to beef up their existing 440 billion-euro rescue fund.