Gold fell more than 2 percent to one-week lows on Monday for its weakest session so far this year after a late sell-off triggered by oil's continued rout and a stronger dollar ahead of the key Federal Reserve meeting later in the week. Bullion prices had weakened in early trade as the dollar firmed before the Fed meeting on Tuesday and Wednesday, which could provide clues on the timing of a possible interest rate rise by the US central bank.
"Gold was a victim to the fall in crude," said Tai Wong, director, metals trading at BMO Capital Markets in New York. The drop was conspicuous for its size and speed amid low volumes: Prices fell nearly 2 percent within three hours, erasing all of last week's gains. Spot gold fell to a session low of $1,190.59 an ounce, and was down 2.4 percent at $1,193.26 by 4:29 pm EST (2127 GMT).
Bullion climbed 2.6 percent last week, its largest such increase since October, but investors were cashing in after gold failed to breach key resistance convincingly at $1,235. US gold futures for February delivery slipped 1.2 percent to settle at $1,207.70 an ounce. Silver fell 5.1 percent for its worst day this year to $16.12 an ounce, on technical selling after falling below its 50-day moving average at $16.56. Platinum dropped 1.5 percent to $1,206.25 an ounce. Palladium slipped 1.9 percent to $794 an ounce.
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