Gold fell over 1 percent on Monday, extending last week's 7 percent decline, hurt by a stronger dollar amid worries over an early end to the US Federal Reserve's stimulus programme. Gold for immediate delivery was trading near three-year lows. Even though stocks underperformed, investors shunned gold's usual appeal as a safe-haven asset, while physical demand in India and China was muted.
"The market is very bearish at the moment and we continue to see more liquidation," said a trader in Hong Kong. "We can see some physical buying interest but not enough to support prices." The most recent sell-off in gold, down 24 percent this year, began last week when the US Fed held a policy meeting to consider scaling back its $85 billion monthly bond purchases.
Spot gold opened near $1,300 in early Asian trading but had lost 1.3 percent to $1,280.55 an ounce by 0648 GMT. Last week, the metal recorded its worst weekly performance since September 2011, falling to a near-three year low of $1,268.89. Comex gold fell about $12 to $1,279.70. Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell a further 0.54 percent to 989.94 tonnes on Friday - the lowest in over four years.
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