Gold prices dipped Monday, as the dollar rallied against European currencies amid fresh signs of global economic troubles.
Energy prices dropped sharply, while agriculture futures were mostly lower.
Signs of economic distress in Europe gave the greenback a boost against the euro and the British pound on Monday. Demand for gold flourishes when the dollar falls, as the yellow metal is used as a hedge against inflation and a weak buck. So the dollar's renewed strength on Monday weighed on gold prices.
The European Commission said euro zone business and consumer confidence dropped to 24-year lows in March. Meanwhile, the Bank of Spain this weekend was forced to bail out a bank for the first time since the financial crisis began.
The European Central Bank is widely expected to cut its main interest rate later this week, which also has the potential to drive demand for the U.S. currency. Cutting interest rates can undermine a currency and lead investors to shift money into places where they can make better returns.
"Investors are once again parking funds in the greenback," wrote Jon Nadler, senior analyst at Kitco Bullion Dealers Montreal, in a research note.
Gold for June delivery fell $7.60 to settle at $917.70 an ounce on the New York Mercantile Exchange.
May silver dropped 23 cents to $13.0330 an ounce, while May copper futures lost 7 cents to $1.7660 a pound.
On Wall Street, all major indexes fell around 3 percent including the Dow Jones industrial average, which dropped about 254 points. The White House's rejection of General Motors Corp. and Chrysler's turnaround plans helped spark the decline, which came after three weeks of gains.
The Obama administration raised the possibility of a controlled bankruptcy of one or both of the companies. Combined with renewed fears about the stability of the financial industry, the news served as a wake-up call for investors who had started to believe that maybe the economy was beginning to turn around.
Investors also are anxious as the G-20 leaders of industrialized and developing countries prepare to meet later this week in London. The group is expected to increase financial regulation, but investors' hopes for a coordinated fiscal stimulus have dissipated.
Energy prices retreated on the Nymex, with oil prices plunging below $49 a barrel, amid doubts about the potential for a resurgence in demand.
Light, sweet crude for May delivery fell more than 7.6 percent, or $3.97, to settle at $48.41.
Gasoline for April delivery shed 10.8 cents to settle at $1.3799 a gallon while heating oil fell 9.02 cents to settle at $1.3426 a gallon.
Grain prices mostly fell on the Chicago Board of Trade.
May soybeans fell 12.5 cents to $9.0450 a bushel, while corn for May delivery slipped less than 1 cent to $3.8625 a bushel.
May wheat futures inched up 5.25 cents to $5.1250 a bushel.
