AAP, with a staff reporter
Gold futures have settled below $US1,600, amid renewed concerns the Federal Reserve would roll back its monetary easing measures sooner than investors expect.
The most actively traded contract, for April delivery, fell $US19.80, or 1.2 per cent, to settle at $US1,595.70 a troy ounce on the Comex division of the New York Mercantile Exchange.
Gold prices retreated below the psychologically important $US1,600 mark, erasing much of the previous session's gains, after Fed chairman Ben Bernanke said the central bank may review its exit strategy "some time soon".
Investors have flocked to gold in recent years, as some feared the Fed's bond-buying policies would trigger higher inflation and sought to fireproof their wealth against such risks.
Gold is widely considered a hedge against inflation because it tends to keep its value better than other assets during periods of high inflation.
Stronger US equities added to the pressure on gold.
Gold futures have struggled to find traction in recent months as brighter economic outlook and a run up in stocks saw investors flock to the riskier assets in pursuit of greater profits.
Gold traders are also closely following political developments in Italy after a general election over the weekend resulted in gridlock.
Former prime minister Silvio Berlusconi's centre-right coalition has taken an anti-austerity stance that has drawn voter support from the left-wing coalition led by the Democratic Party's Pier Luigi Bersani.
"The prospect of a Berlusconi win is positive for gold and silver," Mr Zeman said.
Investors worried that Italy's debt load may destabilise the euro, and endanger euro-denominated wealth, are likely to stock up on precious metals as a hedge, he said.