After giving up the gains which were seen in overnight trading at the New York open, gold went on to mostly mimic Friday's action, closing about $1 lower than Friday's close. Spot silver performed a bit better, closing down two cents on the day, but slightly above Friday's close. The dollar giving up its own gains Monday didn't seem to appreciably help precious metals. Speculators are still spooked over last Thursday's release of the minutes from December's Federal Reserve Open Market Committee, in which some members expressed unwillingness to continue bond buying/money printing through the end of 2013.
Those worries are focused on inflation, and the difficulty the Fed will run into when trying to divest itself of the Treasury bonds and MBS (mortgage-backed securities) it now owns. The Fed already has nearly $3 trillion of these assets on the books. While the "paper gold" market wilts, physical gold purchases continue among investors, asset managers and central banks, especially in developing nations.