Gold prices fell on speculation a drop in commodity costs will damp demand for the precious metal as a hedge against inflation. Silver and platinum also declined.
The Reuters/Jefferies CRB Index of 19 raw materials is down for a fifth straight session, heading for the biggest annual decline ever. Crude oil, gasoline, corn, soybeans, wheat and copper have tumbled from records in 2008. Gold has declined 18% from the all-time high of $US1033.90 an ounce in March.
"Future inflationary pressures are weakening, and that's putting a damper on gold," said Matt Zeman, a metals trader at LaSalle Futures Group. "Inflation is dissipating as crude oil continues to work its way lower."
Gold futures for February delivery fell $US3.30, or 0.4%, to $US843.90 an ounce on the Comex division of the New York Mercantile Exchange. Gold is the only precious metal still poised for an annual gain.
Silver futures for March delivery declined 21 cents, or 1.9%, to $US10.66 an ounce on the Comex.
Platinum futures for April delivery dropped $US2.10, or 0.2%, to $US859.10 an ounce on the Nymex. Palladium for March delivery was little changed at $US174.50 an ounce.
