On Monday, gold (NYSEARCA:GLD) futures for December — the most active contract — dropped $5.50 to close at $1,327 per ounce, while silver (NYSEARCA:SLV) futures edged 7 cents lower to finish at $21.86.
Both precious metals closed off their lows as Federal Reserve President of New York William Dudley said the economy is not yet strong enough to dial down quantitative easing, which is currently running at a pace of $85 billion per month.
In a speech on Monday at Fordham university, he said: “In my view, the economy is slowly healing. But, while significant progress has been made since the end of the recession, there remain a number of headwinds that have offset the improvement in the underlying fundamentals. As a result, we have yet to see any meaningful pickup in the economy’s forward momentum. The most notable recent headwind, of course, has been the large amount of fiscal drag this year from the payroll and income tax increases and the budget sequester. Also noteworthy is the tightening of financial market conditions that has occurred since May.”