Bullion's losses widened after data showed the U.S. manufacturing sector expanded last month at its fastest pace in 2.5 years, while hiring also accelerated.
"The ISM news should not trigger a selloff in gold like this. A lot of momentum-driven and institutional investors are piling on gold's decline by short selling it,'' said Jeffrey Sica, chief investment officer at Sica Wealth Management, which has more than $1 billion in client assets.
Spot gold plunged 2.2 percent to $1,224 an ounce. The metal ended November down 5.4 percent, its biggest monthly decline since June and its third consecutive month of losses. U.S. gold futures for February delivery settled 2.3 percent lower, at $1,221.9 an ounce.