Gold and silver futures fell the most in three months amid concern that the global economy is slowing and China may refrain from additional economic stimulus.
Bank of Israel Governor Stanley Fischer said the world is â€œawfully closeâ€ to a recession. Peopleâ€™s Bank of China Deputy Governor Yi Gang said that while policy makers will provide â€œappropriateâ€ stimulus to stabilize growth, the central bankâ€™s main task is price stability, citing bubble risks in housing.
â€œThere are no clear signals from China whether there will be more stimulus,â€ Phil Streible, a senior commodity broker at R.J. Oâ€™Brien & Associates in Chicago, said in a telephone interview. â€œAlso, overall slowdown concern is sending all commodities, including precious metals, down.â€
Gold futures for December delivery tumbled 1.3 percent to settle at $1,737.60 an ounce on the Comex at 1:47 p.m. in New York, the biggest drop for a most-active contract since July 6. The metal fell 1.2 percent last week.
Silver futures for December delivery declined 2.8 percent to $32.743 an ounce, the largest decline since June 21.
The Standard & Poorâ€™s GSCI Spot Index of 24 raw materials slipped as much as 1.4 percent to a one-week low.
Gold declined before tomorrowâ€™s second U.S. presidential debate because investors are concerned that Republican Mitt Romney may cut government spending if elected, Streible said.
â€œRomney strength is negative for gold as he is anti- government spending,â€ Streible said.
Some polls showed that Romney gained momentum following the first debate against President Barack Obama on Oct. 3. The election is on Nov. 6.
On the New York Mercantile Exchange, platinum futures for January delivery slumped 1.6 percent to $1,632.30 an ounce. Palladium futures for December delivery slipped 1 percent to $632.60 an ounce.
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