Little Christmas cheer for gold price, silver drops below $30 again

Gold for February delivery shed 60 cents to settle at $1,659.50 an ounce in New York in quiet pre-Christmas trade Monday.

The metal regained some of its footing after on Friday after a week that saw the metal give up more than 2% or $35 in value.

Gold has been losing ground ever since the US Fed's announcement on December 12 of a major shift in monetary policy.

Conventional wisdom in the gold market has been that when central banks flood the markets with cheap money under quantitative easing programs gold benefits thanks to its status as an inflation hedge.

But that link now appears to have been severed and gold is acting more like riskier assets such as stocks.

Stocks have been selling off as fears over the fiscal cliff intensify – if no deal is reached it could topple the US back into recession.

Meanwhile, March silver futures gave up 31 cents, or 1%, to settle at $29.90 an ounce.

The volatile metal lost more than 6% last week and is trading under $30 for the first time since August.