Gold slumps as investors rush for cash

Gold futures on the COMEX Division of the New York Mercantile Exchange suffered sharp drop on Monday, as investors liquidated gold holdings to alleviate fund dry-up amid weakened financial markets. A strengthened dollar also added to the negative tone. The most active gold contract for Dec. delivery lost 46.5 U.S. dollars, or 2.7 percent, to 1,678.6 dollars per ounce, the lowest settlement in four weeks. Market analysts said that gold moved in tandem with riskier assets recently, as the overall fund availability turned strained following drops in the world's equity markets amid worries over the government debt in Europe and the United States. Aside from fears about Italy and other debt-strapped euro zone countries, investors worried about the impending failure of the " super committee" in the U.S., in which lawmakers of a deficit- reduction panel could not agree on how to shave the country's debt. Meanwhile, U.S. dollar's rally also contributed to gold's weakness. The dollar index on Monday traded at around 78.23, up 0. 26 percent from the prior trading day. Silver for Dec. delivery shed 1.3 dollars, or four percent, to 31.116 dollars per ounce. Platinum for Jan. delivery also dropped 44.9 dollars, or 2.8 percent, to 1,543.8 dollars per ounce.