Gold futures settled lower on Monday, but were heading for their best quarterly performance in a year, despite fading support from a possible U.S. government shutdown, but the outlook remained weak due to the inevitable tapering of monetary stimulus.
Bullion has gained around 7.5 percent since July, but analysts noted that this performance came from a low base following a spectacular crash in the previous quarter, which included the biggest two-day drop in 30 years.
Spot gold was last down 0.5 percent to $1,329 an ounce after a 1-percent gain on Friday, while U.S gold futures settled $12.20 lower at $1,327 an ounce. Activity was thin as a number of market participants were attending an industry conference.
"I think that people realize that this little rally we had ... is not going to provide any lasting support for gold," said Jesper Dannesboe, senior commodity strategist for Societe Generale.