Gold dropped 1 percent on Monday, its biggest one-day drop since July, as encouraging US retail sales data prompted funds to reduce their bullish bets in bullion after its recent sharp rally. Spot gold was down 1 percent at $1,737.03 an ounce by 2:30 pm EDT (1830 GMT), having earlier fallen to $1,728.75, the weakest since September 13.
US COMEX gold futures for December delivery settled down $22.10 an ounce at $1,737.60, with trading volume on track to finish in line with its 30-day average, preliminary Reuters data showed. Gold rose to a 2012 high of $1,795.69 an ounce earlier this month. However, several subsequent rallies to break above $1,800 an ounce had failed and were met by heavy technical selling.
Spot gold's relative strength index (RSI) fell to 45 on Monday, down sharply from an overbought level of over 80 in September, suggesting some investors might start to look for bargains. Silver slid 2 percent to $32.76 an ounce. Among platinum group metals, spot platinum was flat at $1,642.60 an ounce, while spot palladium eased 0.1 percent to $627.90 an ounce.
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