Precious metals end sharply lower

Gold hits a three-week low

Bullion metals ended sharply lower on Monday, 22 December 2014 at Comex. Gold prices ended the U.S. day session sharply lower and hit a three-week low Monday. Gold futures were unable to hold on to cautious gains, dropping well below $1,200 an ounce Monday.

Gold for February delivery fell $16.20, or 1.4%, to $1,179.8 an ounce.

Silver for March fell 34.2 cents, or 2.1%, to $15.688 an ounce.

Gold prices initially rose alongside oil, but reversed course before midday. Crude prices also lost ground, while stock prices rose in light pre-Christmas trade.

Both metals ended last week sharply lower, with gold shaving off 2.2% and silver losing 6%. Traders have said that the losses were related to the recent slump in oil prices and the dollar rising against other currencies. Oil is the world's most-traded commodity, so other commodities can move in sympathy with it.

Trading activity could be active on Tuesday, as the main U.S. economic report is on tap this week: the third-quarter gross domestic product report. GDP is expected to be up 4.3%, year-on-year, versus the previous reading of up 3.9%. Tuesday could be the busiest trading day of the week as there are also several other key U.S. economic reports due out.

European and Asian markets were also quieter overnight. The feature in Europe was the Italian 10-year bond yield fell to a record low of 1.68%, reports said. Ironically, EU country bond yields are falling when anxiety about the health of the European Union is rising.

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