Gold settled lower on Monday, extending last week's 7 percent slide as fears of a cash crunch in China spooked investors, and a slide in U.S. equities prompted some to liquidate bullion to cover margin calls.
U.S. gold futures for August delivery fell $14.90 to at $1,277.10 an ounce, with trading volume on track to finish below its 30-day daily average, preliminary Reuters data showed.
Other precious metals including silver and platinum group metals fell at least 2 percent on global economic fears. Gold hovered about $10 above a three-year low reached last week.
Earlier in the day, the S&P 500 index, a U.S. equities benchmark, initially dropped 2 percent on worries about the U.S. Federal Reserve's plan to end economic stimulus, and about a cash squeeze in China that could hurt the world's second-largest economy. However, stocks sharply pared those losses in midday trading, as investors hunted for bargains.