Gold and silver drop to six and seven year lows respectively

Prices drop as crude continues to plunge

Bullion prices ended the U.S. day session lower on Monday, 14 December 2015 as crude oil dropped to a nearly seven-year low below $35.00 a barrel in early trading, before rebounding. Silver prices dropped to a six-year low.

Gold dropped 1.1% to settle at $1,063.40 an ounce, while a key dollar index gained slightly. March Comex silver was last down $0.194 at $13.69 an ounce.

Crude oil prices Monday and hit $34.53 a barrel, basis January Nymex futures.

On Tuesday begins the highly anticipated two-day meeting of the U.S. Federal Reserve's Open Market Committee (FOMC). The marketplace generally expects this week's FOMC meeting to see the Fed raise the U.S. fed funds level from the present rate of zero to 0.25%. What will be closely watched is the Fed's language that could provide clues on the pace of future interest rate increases. Fed Chair Janet Yellen holds a press conference right after this meeting's conclusion on Wednesday afternoon.

In overnight news, Euro zone industrial production in October rose a better-than-expected 0.6% month-on-month, and was up 1.9% year-on-year. In other news, the Chinese currency, the yuan, fell to a four-year low against the U.S. dollar Monday, as China monetary officials work to keep the world's second-largest economy afloat. There was no major U.S. economic released on Monday.

A key dollar index edged higher late Monday, reversing a decline from earlier in the session, ahead of a widely anticipated meeting of the Federal Reserve's interest-rate setting committee. The ICE U.S. Dollar Index, a measure of the dollar's value against a basket of six rival currencies, was up 0.1%. The dollar pared its early decline against both the euro and the yen to finish the session little-changed on the day against both rivals.

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