Gold dropped 1 percent on Tuesday for its biggest fall in a month, as a sharp drop in crude oil on a bearish forecast from Goldman Sachs dragged the metal further from record highs. Rallying prices of US government debt also took some safe-haven bids away from gold, which fell for a second straight day, after Japan raised the severity level of the crisis at its quake-stricken nuclear plant.
Bullion has risen 11 percent since late January as rallies in oil and grains stoked inflation worries. After hitting 31-year highs on Monday, silver also fell but less than gold despite the white metal's higher price volatility. Spot gold dropped to $1,451.73 an ounce by 3:44 pm EDT (1944 GMT), having earlier hit a one-week low of $1,443.49. On Monday, gold hit a record at $1,476.21.
US gold futures for June settled down $14.5 at $1,453.60 an ounce, with trading volume rebounding after slower-than-normal activity in the last several sessions. US silver trade was also heavy for a second straight day to top 130,000 lots, preliminary Reuters data showed, one of the busiest days of 2011. Silver reversed earlier gains to trade down 0.5 percent at $39.96 an ounce, and was about 5 percent below Monday's 31-year high at $41.93.
The spread between gold and silver - showing the relative strength between the two metals - has nearly halved since last August. Among platinum group metals, platinum lost 0.8 percent at $1,765.46 an ounce, while palladium fell 2.9 percent to $759.
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