Silver has pushed to a three-month high, while gold eased, as traders weighed the effect of weaker US economic data on the Federal Reserve's potential stimulus rollback.
Silver for September delivery rose 1.2 per cent to settle at $US24.01 a troy ounce on the Comex division of the New York Mercantile Exchange, the highest settlement since May 3.
Silver had snapped higher on Friday after data showed a slowdown in US new-home sales. Futures extended those gains on Monday following a weaker-than-expected reading on US orders for durable goods.
"It's just more carryover from Friday," said Frank McGhee, head precious metals dealer with Integrated Brokerage Services.
The housing data in particular pushed metals traders to reassess their expectations for a reduction in Fed bond buying, McGhee said.
Precious metals traders have kept a close watch on US economic data recently to gauge the likelihood that the Fed would limit or end its stimulus. Some investors buy gold and silver as hedges against the inflation that can follow programs like the Fed's current $US85-billion-a-month bond buying effort.
"The market is skewing its view toward a less-aggressive reduction" in Fed bond buying, said Bart Melek, head of commodity strategy with TD Securities in Toronto.
A steadily improving US labour market has put pressure on precious metals prices this year. Many economists expect the Fed to announce a reduction in bond purchases after the bank's September meeting.
In addition to its application as an investment product, silver is widely used in electronics, making market prices sensitive to shifts in expectations for growth. Recent readings on manufacturing activity in China and the euro zone have stoked demand hopes for industrial metals.
Gold futures pulled back in thin trading on Monday as investors cashed out after prices breached $US1,400 an ounce.
The most actively traded gold contract, for December delivery, fell $US2.70, or 0.2 per cent, to settle at $US1,393.10 a troy ounce on the Comex. Gold had settled at an 11-week high on Friday.
Trading volume was lower than normal on Monday, with London's precious metals trading hub closed for a bank holiday. Early Monday, gold rose above $US1,400 an ounce for the first time since early June before giving up those gains.
Settlements (ranges include open-outcry and electronic trading):
London PM Gold Fix: $1,377.50*; previous PM $1,375.50
Dec gold $1,393.10; down $2.70; Range $1,388.40-$1,407.00
Sep silver $24.010, up 27.2 cents; Range $23.800-$24.425
Oct platinum $1,544.50, up $2.90; Range $1,531.10-$1,550.80
Sep palladium $746.05, down $4.80; Range $743.10-$754.25