Dollar Gold Prices fell in Asian and early London trade on Monday, dropping 1.3% to a 6-session low of $1411 per ounce as global equities slipped and the US currency rose on the forex market.
Silver Prices lost 2.1% to hit a 3-session low beneath $36.50 per ounce.
Crude oil and the broader commodities markets were little changed, as anti-Gaddafi forces in Libya - benefiting again from US-led airstrikes - pushed westwards towards Tripoli.
US secretary of state Hillary Clinton gave an emphatic No when asked if there would be military action against the regime in Syria, where 12 people were killed in anti-government protests on Saturday.
We could be in for a pullback in the short term, says one precious-metals dealer in London in a note, pointing to the inability of the Gold Price to push upwards from last week's new record high above $1447.
It feels as if we are standing on an increasingly slippery slope, says a Hong Kong dealer.
The market has had a huge move up and the higher we go up, the more chance of a bigger correction, says Afshin Nabavi, quoted by Bloomberg, at Swiss refiner MKS's Finance division.
Writing today in the Financial Times, We would consider [in the 1990s] a healthy average capacity utilisation to be maybe 70%, says John Dizard, quoting an un-named Swiss gold refinery director.
Now, technically, we have been running at over 100% of capacity...going three shifts, 24 hours a day every day of the year.
This surge in demand means the major Gold Bullion refineries can overcome their high fixed costs and are all expanding operations, says Dizard. For existing plant, however, it means there is little time to do necessary maintenance.
As a group last week, gold refiners and the other industry-side players classed as Commercial raised their always bearish bets on the Gold Futures market, according to Commitment of Traders data from US regulator the CFTC.
Net of bullish Gold Futures contracts, the Commercials' short position grew by 3.5% in the week-ending last Tuesday to the equivalent of 817 tonnes. Right in line with the last two years' average, it was exactly matched on the other side of the trade by a rise in the Speculative net long position held by investment funds and private individuals.
This is an encouraging sign that investors are less bearish on gold, says the latest CFTC analysis from Standard Bank's commodity team.
Should safe-haven demand remain intact, we could see gold recover from the liquidations seen in the aftermath of the earthquake in Japan.
Japanese officials today said that highly radioactive water has been found outside the reactor buildings at the damaged Fukushima plant.
New government advisor Takayoshi Igarashi of Hosei University is pressing for ¥20 trillion ($245bn) to be spent on de-centralizing power, Bloomberg reports. Because We have no idea when the big one's going to hit Tokyo, but when it does [that earthquake] is going to annihilate the entire country because everything is here.
German chancellor Angela Merkel 's Christian Democrat party suffered a sensational loss in the weekend's local elections, with a left-wing coalition of Social Domecrats and the anti-nuclear Green Party now likely in Baden-Württemberg.
The central bank in Dublin has meantime asked the European Central Bank to fund the €60 billion ($42bn) in emergency loans it's made to support Ireland's banks.
Priced in the Euro, Gold Bullion slipped 0.8% early Monday to €32,360 per kilo as the single currency retreated to a 10-day low near $1.40.
The Gold Price in Sterling dropped back to £885 per ounce - halving last week's 2.0% rise - as the Pound fell to an 8-week low vs. the Dollar beneath $1.60.
Silver continues to garner the most interest, says Standard Bank in its latest analysis, saying that last week's addition of 181.5 tonnes to trust-fund ETF positions confirms the market's current preference for silver.
In the US futures market, says London's VM Group consultancy, latest silver data show the largest exit of bearish players since the start of Feb., enabling the speculative players' net long position (of bullish minus bearish bets) to record its first gain after three weeks of declines.
Noting the sharp outperformance of silver relative to Gold Bullion over the last 12 months, plus the sound fundamentals, Daily Telegraph Questor analyst Garry White today cautions that the Silver Price could be ahead of itself - especially if there is a quick resolution to the current turmoil in the Arab world.
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