Gold dropped 2.5 percent on Monday, its worst one-day drop in two months, hit by technical selling and a global market maelstrom fuelled by government debt fears in Europe and the United States. Global debt worries have prompted funds and other institutional investors to book profits before year's end, traders said. Prices are still almost 20 percent up for the year, one of the few bright spots in the investment world.
Bullion has lost 6 percent in the past four sessions, underperforming the RJ/CRB commodities index as investors have liquidated positions to cover margin calls outside of the gold market and to book profits ahead of the year end, traders said. Spot gold was down 2.5 percent at $1,683.28 an ounce by 3:52 p.m. EST (2052 GMT). Last week, gold fell around 3 percent, its largest weekly decline since late September.
US gold for December delivery settled down $46.50 at $1,678.60 an ounce. Volume was about 50 percent above its 30-day norm, preliminary Reuters data showed, reversing a slower trading trend of the past two months. Spot silver dropped 2.4 percent to $31.60 an ounce. Platinum fell 2.3 percent to $1,550.99 and palladium slid 2.4 percent to $587.
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