Gold closed slightly lower Monday as resurgent worries about Europe's finances drove investors to sell stocks and buy dollar-denominated assets, not including gold.
German Chancellor Angela Merkel stoked those worries by warning her party that their support for her efforts to keep Greece and Italy from defaulting was essential.
Europe is in one of its toughest, perhaps the toughest hour since World War Two, she told a meeting of Christian Democrats.
European stocks closed down on all major indexes, with France's CAC 40 down 1.3 percent and Germany's DAX off 1.2 percent.
The euro also fell while the dollar climbed nearly 0.67 percent against a basket of six major currencies.
U.S. stocks meanwhile were lower: the Dow Jones Industrial Average fell 91.8 points to 12,061.88, the Nasdaq Composite was off 19.95 to 2,658.8 and the S&P 500 gave up 13 to 1,250.80.
It's not obvious to us that gold is behaving as a safe-haven store of value at all. At the moment, it does appear to be behaving like a commodity that benefits from liquidity and doesn't necessarily benefit from any potential catastrophe in Europe, Nic Brown, head of commodity strategy at Natixis, told Reuters.
Gold for December delivery fell $9.70 to $1,778.40, while gold for immediate delivery fell $18.05 to $1,778.18.
Silver for December delivery was off 66 cents to $34.02, while silver for immediate delivery slipped 64 cents to $34.18.
The dollar climbed 0.73 percent against six major currencies.
The Dow Jones Industrial Average fell xxx, the Nasdaq Composite was off xxx and the S&P 500 declined xxx.