Gold futures on the COMEX division of the New York Mercantile Exchange posted on Monday the biggest daily drop in 2014 on gains of stocks.
The most active gold contract for August delivery dropped 30.7 dollars, or 2.3 percent, to settle at 1,306.7 dollars per ounce.
Sluggish physical demand also prompted investors to take profit on recent gains. India has decided to maintain its 10-percent import duty on gold, dampening gold demand expectations.
Investors are waiting for Federal Reserve Chairwoman Janet Yellen's testimony on Tuesday.
Market analysts believe that speculation is the major reason behind the latest rise in gold's price. Barclays expects 2014 average price of gold at 1,260 dollars per ounce, and predicts that gold will further drop to 1,200 dollars by the third quarter.
Silver for September delivery fell 54.7 cents, or 2.55 percent, to close at 20.914 dollars per ounce. Platinum for October delivery lost 20.8 dollars, or 1.37 percent, to close at 1,493 dollars per ounce.