Gold cemented its longest run of monthly declines in more than 16 years on Thursday, as the dollar edged up versus the euro and signs of moderate economic recovery continued to blunt its appeal to investors.
Precious metals extended their losses after a report showed the U.S. manufacturing sector expanding at a more rapid pace than what most analysts had expected.
Spot gold fell more than a percent on the day to $1,578 per ounce, on course for a monthly decline of nearly 4 percent. The embattled precious metal has been in the red for five straight months, the longest such losing streak since late 1996 to early 1997.
Bullion has struggled after 12 years of rising prices as signs of improving economic conditions in China and the United States and stabilization in much of Europe have lured investors away from safe-haven assets.
Reflecting the negative sentiment among fund investors, an exodus from the SPDR Gold Trust, the world's biggest gold-backed exchange-traded fund, continued for a seventh consecutive session, marking the longest outflow in the fund's history.
"What we are seeing just now is a lack of love from investors towards gold," Credit Suisse commodity analyst Karim Cherif said. "Why would you be in a market that doesn't pay any dividends and yield, and is most likely to underperform in an environment where economic indicators are seen improving?
"Investors are starting to consider other alternatives, as gold played its role during times when we had high uncertainties and now we are looking at different places where to play the market," he added.
U.S. gold futures finished the session down by $17.60, settling at $1,578.10 an ounce.