NEW YORK, Oct 10: Gold prices fell sharply on Tuesday as large speculators sold on the lack of any big follow-through rally as the U.S. military pounded targets in a third day of air raids in Afghanistan.

US stock and bond markets were relatively calm amid the US-led military campaign that has followed the Sept. 11, attacks on US landmarks.

Oil edged up but other industrial commodities like cotton and lumber fell further on the poor economic outlook. Cocoa and coffee also closed weak.

The Commodity Research Bureau index of 17 futures contracts fell 1.61 points to close at 186.71.

At the COMEX, the speculative exit from gold also pressured silver.

December gold closed $3.70 lower at $289.70 an ounce, triggering “stop-loss” sell orders below $290. December silver fell 12 cents to $4.55 an ounce.

Gold had risen only slightly after the United States and Britain began their attacks on Taliban targets on Sunday. But it was not able to extend the $20-plus rally seen right after the attacks a month ago, despite the Florida anthrax scare and a sense of vulnerability in America to biological weapons.

The hostilities would have to go to a much, much higher level than where we are now to really have any impact, O’Neill said. —Reuters