Gold prices have sunk to their lowest level in seven weeks, as investors continue to discount the possibility that the conflict in Ukraine will intensify.
Gold for June delivery, the most actively traded contract, on Monday closed down $US10.50, or 0.8%, at $US1,283.80. It was the lowest close for the precious metal since February 11.
Prices for gold are down more than more than 7% since March 14, as it became clear that the West would limit its response to Russia's annexation of Crimea to a series of narrowly-targeted sanctions.
Russia has unsettled its neighbours, however, by massing troops along Ukraine's eastern border in what Moscow claims is part of a routine troop exercise, giving gold price some support.
Some investors buy gold as a hedge against geopolitical and economic uncertainty, as the precious metal is seen holding its value better than other assets in times of market turmoil.
Despite the presence of Russian troops on Ukraine's border, "the market clearly believes that Russia has no intention of invading Ukraine, and is discounting gold accordingly," Ira Epstein, a director at the Linn Group, said.
Gold investors had little response to comments from Federal Reserve chair Janet Yellen, who on Monday said the US economy still requires plenty of support from the central bank's low interest rate policy. Some market watchers saw the comments as an attempt by Dr Yellen to play down comments made on the rate-setting meeting earlier this month, where she gave a more optimistic-than-expected assessment of the economy.
"Investors seem to be believe that we will get better economic numbers coming in to spring, and that will keep the Fed on its current course," Peter Hug, global trading director at Kitco Metals, said.
The Fed reduced its monthly bond purchases to $US55 billion on March 19, from a high of $US85 billion, and is expected to finish unwinding the program before the end of the year. The Fed's bond purchases have weighed on the US dollar, while making gold attractive as a hedge against inflation.