Gold dropped more than 1 percent and silver slid 3 percent on Monday, triggering automatic sell orders in thin pre-holiday dealings after U.S. existing home sales fell to a six-month low, and as oil prices eased back toward $55 per barrel.
Spot gold was down 1.3 percent at $1,180.05 an ounce. It lost about 2 percent last week on a strong dollar and expectations of rising U.S. interest rates.
U.S. gold futures for delivery in February settled $16.20 lower at $1,179.80 an ounce. The largest open interest in January options was at $1,200 ahead of expiry on Tuesday, traders said.
U.S. home resales tumbled to a six-month low in November after two straight months of strong increases, underscoring the uneven nature of the housing market recovery.
"It was a slow drift down toward the (sell) stops. It was a little bit delayed," said a U.S. trader.
Sell-stops were triggered in spot gold around $1,192, the trader said.
Oil prices resumed their downward march on Monday, doubling back on the biggest one-day gain in over two years, after Saudi Arabia's powerful oil minister said OPEC would not cut production at any price.
Equity markets worldwide edged higher.
Prices were forecast to remain in tight ranges during the holiday-shortened week and were heading for a 2 percent fall for the year.
The dollar was flat against a basket of currencies, mostly because of euro strength, but remained within striking distance of a nine-year peak set on Friday. A weaker dollar makes gold cheaper for holders of other currencies.
Gold received some early support from buying in top consumer China, where local prices were at a premium of about $3 an ounce to the global benchmark, though they slipped later in the session to about $1.
The market will monitor a series of U.S. economic data, including GDP, for the third quarter on Tuesday.
"I remain very bearish for 2015 ... If you have a sentiment of positive risk appetite and at the same time for a higher dollar and higher interest rates, gold will not be able to move higher," ABN Amro analyst Georgette Boele said.