Gold settled lower on Monday as a rebound in equities dented bullion's safe-haven appeal, and lackluster physical buying prompted traders to cash in three days' gains.
Gains from the stock market diverted investment interest from gold, as the Dow and S&P 500 extended their record highs, rising above 16,000 and 1,800 respectively. Equities also climbed on signs of ambitious economic reform in China and the prospect of extended stimulus from the Federal Reserve.
Also weighing down on investor sentiment was last week's decline in the holdings of SPDR Gold Shares, the world's largest gold-backed exchange-traded fund.
"Until such time as financial investors—be they short—or longer-term-oriented - return to the market, gold and silver will find it hard to make any significant gains,'' said Eugen Weinberg, head of commodities research at Commerzbank.