Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold dropped 1.6% to close just above $1,275 as political turmoil in Germany boosted the dollar, prompting traders to take profits from last week's 1.8% rise. Technical selling also pressured the metal after a massive sell-order triggered stop-loss orders early in the session.

Negotiations to form a new German government fell apart over the weekend, leaving the Eurozone's largest economy in political gridlock and Prime Minister Angela Merkel's future in doubt.

The dollar rose 0.4% against major rivals as euro slumped on the development. A rising dollar typically weighs on gold and other by making them more expensive overseas.

Despite dollar strength, gold initially found modest support as Germany's political troubles prompted flights to safety. But that support was quickly overwhelmed by technical selling after one or two unknown market players dumped $2 billion in futures contracts on Comex within a few minutes, tripping automatic sell-orders.

The other precious metals also fell, with silver and platinum losing 2.8% and 2.9%, respectively, while palladium slid 0.8%.

At the Comex close: December gold fell $21.20 to $1,275.30; December silver dropped 49 cents to $16.88; January platinum plunged $27.68 to $926.92; and December palladium slid $7.94 to $984.95 an ounce.