SPOT gold plunged to the lowest in almost three years yesterday after US Federal Reserve Chairman Ben Bernanke signaled the central bank's quantitative easing may end given a stronger US economy.

Global spot price tumbled 5.8 percent to around US$1,295 per ounce yesterday, the first time gold had traded below US$1,300 since 2010.

Gold prices in Shanghai also fell, tracking losses in overseas markets. The spot contract for gold of 99.99 percent purity on the Shanghai Gold Exchange shed 2.8 percent to 266.48 yuan (US$43.20) per gram. Gold for December delivery dimmed 2.5 percent from the previous settlement to 266.94 yuan per gram on the Shanghai Futures Exchange.

"Gold price will fall more than expected in future," Lu Zhengwei, chief economist at Industrial Bank, said. "The metal will not be a value preservation asset in the next three to five years. Price is on a downward spiral in the next decade."