Gold retreats ahead of Fed policy meeting

Gold futures on the COMEX division of the New York Mercantile Exchange fell sharply Monday on profit- taking ahead of the U.S. Federal Reserve's policy meeting.

The most active gold contract for February delivery lost 13.2 U. S. dollars, or 1.02 percent, to settle at 1,279.40 dollars per ounce.

The precious metal fell as traders were waiting for the Fed to meet on Tuesday to assess when to raise interest rates. The central bank is expected to release a statement when it ends the two-day policy meeting on Wednesday.

Rising U.S. and European equities also put pressure on gold after a Greek election on Sunday in which the anti-bailout Syriza party won the election.

Analysts believe the market had overreacted in advance of the Greek election, and that the profit-taking is a result of buying on rumors and selling on facts. This combination of factors led investors to move away from gold as a safe haven and towards more profitable assets.

Silver for March delivery dropped 31.7 cents, or 1.73 percent, to close at 17.983 dollars per ounce. Platinum for April delivery lost 13.7 dollars, or 1.08 percent, to close at 1,255.00 dollars per ounce.