Fears that the US Federal Reserve may still hike interest rates this year took the shine off the gold price on Monday.
The price of an ounce of the precious metal dimmed 0.4% to US$1,133 as analysts highlighted hawkish comments by San Francisco Fed President John Williams.
Wiliams said that although the Federal Open Market Committee (FOMC) had voted to hold rates at last week's meeting, it was a close call and he expected a rate rise later this year.
St. Louis Fed President James Bullard – who doesn’t vote on the FOMC this year but will do so in 2016 - said there was a “strong case” for normalising policy.
Richmond Fed President Jeff Lacker, who dissented against the decision to keep rates on hold, added that delaying rate hikes may have “adverse effects”.
But CMC Markets chief market analyst Michael Hewson said: "The fact is Bullard doesn’t have a vote until next year, and markets are priced for a 20% probability of such an outcome, meaning it remains unlikely."
Investors in gold do not receive interest, meaning that when interest rates rise, owning the yellow metal becomes less attractive.
Shares in Randgold Resources (LON:RRS) fell 50p to 3813p and silver miner Fresnillo's (LON:FRES) stock slid 11p to 599p.