Precious metals turn pale

Drop in U.S. stocks prompted investors to sell the metal

Bullion prices settled lower on Monday, 298 September 2015 at Comex suffering from their largest daily loss in nearly three weeks, as a drop in U.S. stocks prompted investors to sell the metal as they sought cash to cover losses. The U.S. stock market was down sharply, and European equities declined as traders fretted about slowing economic growth in China. Asian shares also ended mostly lower.

Gold futures for December delivery gave up $13.90, or 1.2%, to settle at $1,131.70 an ounce on Comex. That was the largest single-day point and percentage loss since Sept. 9.

December silver Salso dropped 57.3 cents, or 3.8%, to $14.538 an ounce.

The prospect of higher rates has boosted the dollar and diminished the appetite for gold, which doesn't bear interest. A stronger buck also makes the metal less attractive to investors who purchase dollar-denominated assets in other currencies.

On the plus side, strong August import data from China and India data for gold offered some encouraging signs for the yellow metal.

The marketplace is still obsessed with the timing of the next interest rate hike from the U.S. Federal Reserve. Remarks from Fed Chair Janet Yellen late last week fell into the hawkish monetary policy camp, as Yellen appeared to lay out a case for a U.S. Fed funds rate rise yet this year. Recent upbeat U.S. economic data, including last Friday's stronger-than-expected GDP report, also fall into the camp of monetary policy hawks and U.S. dollar bulls. Federal Reserve Bank of New York President William Dudley chimed in Monday, saying he, too, thinks the Fed will raise interest rates yet this year.

In other overnight news, reports said the government of Switzerland is investigating seven major banks that may have manipulated the price of gold, silver and other precious metals. The focus is on the spreads between the bid and ask prices for the metals.

China's gold imports from Hong Kong and Switzerland doubled in August versus the year-ago period. Demand for gold coming from India was also strong, said the report that was issued by Barclays on Monday.

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