Gold for June delivery at the COMEX division of the New York Mercantile Exchange dropped $10.50 to settle at $1,283.80 an ounce. The gold price traded as high as $1,299.30 and as low as $1,282.70 an ounce.
"People believe the economy is going to come back and the taper is going to continue, so the need for gold just isn't there," Phil Streible, senior commodities broker at RJO Futures, said in a phone interview from Chicago.
Markets jumped by more than 0.8%, with the Nasdaq gaining more than 1%, as Federal Reserve Chair Janet Yellen said Monday that the weak labor market required "extraordinary" commitment to support the moderately expanding economy.
Though loose monetary policy from the central bank usually boosts gold prices, Yellen's comments didn't necessarily suggest the need to slow the Fed's so called taper -- a pullback of its current economic stimulus program.
-- Written by Joe Deaux in New York.
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