Why does gravity forbid local observables?

[IRobot]

I heard in a conference that gravity forbids to construct local gauge invariants like $Tr-\frac14 F^{\mu\nu}_aF_{\mu\nu}^a$ and only allows non-local gauge invariant quantities like Wilson Loops: $Tr P e^{\oint_{\gamma} A_a dx^a}$. Could someone explain me where does it come from? I have a basis knowledge of QFT and GR. If you could had a reference it would be great!

 

[atyy]

http://arxiv.org/abs/gr-qc/9404053v5
http://arxiv.org/abs/hep-th/0512200