Gold fell below $1,200 on Friday to its lowest since August 2010 and is on track to record its worst quarter since at least 1968 on persistent worries over the US Federal Reserve's plan to wind down its monetary stimulus.
Bullion has taken a beating since the beginning of last week - down 15% or over $200 an ounce - after Fed Chairman Ben Bernanke laid out a strategy to wind down the bank's $85 billion monthly bond purchases on the back of a recovering economy.
The lower prices have failed to boost physical demand in Asia, traditionally the biggest buyer of gold, and investors have continued to flee exchange-traded gold funds.
Spot gold reversed earlier gains and declined 0.6% to $1,191.79 an ounce by 01: 50 GMT, having fallen to a three-year trough of $1,180.71 earlier. US gold fell almost $20 to $1,192.1.
A trader in Sydney said that selling emerged ahead of the opening of Chinese markets, adding that stop-loss orders were triggered when gold was sitting on the edge of $1,200.
Prices failed to find support even after markets opened in China, the world's second-biggest gold consumer.
"Chinese buying is not strong enough to support prices. Instead, speculators in China are selling," the trader said.
Shanghai gold futures fell for the ninth straight session. They dropped nearly 4%.
If gold closes near its three-year low, it would be the metal's worst weekly performance since 1983.
It is down 25% for the April-June period, the biggest quarterly loss since Reuters began tracking prices in 1968.
Gold has fallen 30% this year - its worst since 1981 - as investors snubbed its inflation-hedge appeal as a recovering economy stirred fears of an end to central bank support.
Fed officials continued to give mixed signals on when the central bank should taper bond purchases.
New York Fed president William Dudley and Fed Governor Jerome Powell on Thursday sought to dissuade investors that monetary accommodation was fading any time soon, each going so far as to say markets have misinterpreted the US central bank's intentions.
Meanwhile, Atlanta Fed president Dennis Lockhart said the bank could consider pulling back on its bond-buying stimulus even earlier than expected if the US economy grows more quickly than anticipated and the jobless rate falls rapidly.
Concerns over a credit crunch and economic growth in China also weighed on investors. China's central bank is squeezing funds out of the money market, forcing banks to borrow money at historic interest rate levels.
Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, are near four-year lows.
(COMEX gold and silver contracts show the most active months.)