Gold Tumbles As Traders Resort To Profit-Taking

WASHINGTON (dpa-AFX) - Gold prices tumbled on Monday as investors turned cautious with the year-end fast approaching and opted for booking profits from the record highs set in previous sessions.

Front Month Comex Gold for December delivery nosedived by $204.00 (or 4.50%) to $4,325.10 per troy ounce.

Front Month Comex Silver for December delivery went for a tailspin by $6.6300 (or 8.67%) to $69.856 per troy ounce.

Last Friday, Front Month Comex gold for December delivery climbed by 1.08% to $4,529.10 per troy ounce, and for the week, it skyrocketed by 3.85% per troy ounce.

Front Month Comex silver for December delivery spiked by 7.68% to $76.486 per troy ounce, and for the week, it catapulted by 14.42% per troy ounce.

This was a new record high for both gold and silver prices, which increased consecutively for three and five weeks, respectively.

Investors went on to make profits from the new peaks and as a result gold and silver fell steeply.

In Europe, mild optimism surfaced as the diplomatic efforts by U.S. President Donald Trump to end the Russia-Ukraine war started to show signs of positivity.

On Sunday, Trump hosted Ukraine President Volodymyr Zelenskyy at his Mar-a-Lago residential estate in Florida to comprehend Ukraine's demands in the new peace proposal to end the war.

Zelenskyy is demanding solid security guarantees from the west that would deter Russia from any misadventures.

After the meeting, while Trump remarked, 'we are getting a lot closer, maybe very close,' Zelenskyy stated that the negotiations yielded 'significant results.'

Prior to the meeting, Trump had a lengthy telephonic conversation with Russian President Vladimir Putin. Trump commented that the call was 'excellent' and Russia also called it 'friendly, benevolent, and business-like.'

Trump is set to speak with Putin following the negotiations with Zelenskyy.

Even as diplomatic efforts are pursued, the war continues, with Russia claiming to have captured Dibrova village in the Donetsk region in eastern Ukraine.

In South America, the U.S.-Venezuela crisis has escalated further after Trump stated to WABC radio that the U.S. military has 'hit them hard' and 'knocked out' a big facility in Venezuela.

Of note, after accusing the Latin American nation of 'emptying their prisoners into the U.S.' and indulging in 'narco-trafficking,' Trump had already ordered a 'naval blockade' of all sanctioned ships entering or leaving Venezuela.

The U.S. military seized two big oil tankers and Trump had announced that the U.S. will keep the oil or sell it.

Venezuela, with the world's largest oil reserves, has the support of Russia and China. So far, neither Russia nor China (a major buyer of Venezuelan oil) have intervened directly except from condemning the U.S. actions.

Analysts believe that if China enters into the scenario, it could blow up the crisis multifold.

In the U.S., traders are awaiting the minutes of the U.S. Federal Reserve's December meeting to search for clues on the interest rate outlook.

Despite a cautionary remark from Fed Chair Jerome Powell weeks before where he emphasized not to take another rate cut as a given, and the divergent views expressed by several Fed governors, currently CME Group's FedWatch Tool is indicating that investors are betting on a 16.1% chance of a 25-basis-point interest rate cut at the Fed's January 27-28 meeting.

Experts feel that the outcome from the monetary policy meeting could impact the U.S. dollar value and consequently alter gold prices in the short-term.

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