With less than a week to go before the Christmas and year-end holidays, gold was moving between smallish gains and losses Monday morning, and silver was down sharply early Monday as U.S. home builder confidence rose for the third consecutive month, bringing the HMI to its highest level since May 2010, according to the December NAHB/Wells Fargo Housing Market Index.

Europe’s credit crunch continues to ripple outward, straining Eastern European economies, which might need to draw on existing IMF credit facilities to balance ongoing withdrawals from Western banks, according to a Bloomberg report. Meanwhile, European bond market participants are re-jiggering their portfolios to reflect the latest changes in the collateral that the European Central Bank is willing to accept as security against short-term bank loans. Spain’s two-year bonds had a strong bid, rising for the seventh consecutive day.

Spot gold was down nearly 0.5% at 10:55 a.m., with a bid price of $1,591.60 per ounce and an ask price of $1,592.60, having traded as high as $1,608 and as low as $1,588.40. The London afternoon reference price fix came in at $1,598, according to Kitco market data.

Spot silver was down more than 2.6%, bid at $28.95 per ounce with an ask price of $29.05. The morning high as of time of writing was $29.42, and the low was $28.78. Monday’s reference price was set at $28.78 in the London a.m., down a buck from last Friday’s reference price fixing.

Gold bullion prices had rallied 0.5% to $1,607 an ounce by lunchtime in London, while silver bullion prices rose to $29.36 just prior to the New York market’s open — but they still were down 1.2% from last week’s close, according to BullionVault’s London Gold Market Report.

Gold bullion will drop below $1,500 per ounce, according to a Reuters poll of 20 hedge fund managers, economists and traders. “You’re looking at Euro weakness, rather than anything else, as the driving force behind the sell-off (in gold bullion last week),” said David Jollie, analyst at Mitsui Precious Metals. “Whatever your (longer-term) view, you have to ask what the chances are of making money by the end of the year … that says to a lot of people that this is not a market to get longer in.”

Vancouver’s Eldorado Gold (NYSE:EGO) agreed to buy European Gold Fields for about $2.4 billion in cash and shares, a 10% premium to EGF’s closing price on Dec. 16, and 31% higher than its share price on Dec. 5, when EGF announced that it had received offers, according to Bloomberg. EGO shares were down about 10.5% on the news, while Toronto Stock Exchange-listed European Gold Fields shares were down around 1%.

In exchange trading, gold trusts were lower, and the iShares Silver Trust (NYSE:SLV) was sharply lower.

• The SPDR Gold Trust (NYSE:GLD) was showing losses of around 0.25%.
• The iShares Gold Trust (NYSE:IAU) was down about 0.3%.
• The iShares Silver Trust (NYSE:SLV) was nearly 2.7% lower.

Gold and silver mining ETFs were showing losses of more than 1%.

• The Market Vectors Gold Miners ETF (NYSE:GDX) was moving sharply lower, down nearly 1.6%.
• The Market Vectors Junior Gold Miners ETF (NYSE:GDXJ) was down about 1.4%.
• The Global X Silver Miners ETF (NYSE:SIL) was down nearly 1.2%.

Gold mining shares were moving lower across the board to varying degrees.

• Agnico-Eagle Mines (NYSE:AEM) was showing losses of nearly 0.5%.
• Barrick Gold Corp. (NYSE:ABX) was down less than 0.1%.
• Goldcorp (NYSE:GG) was showing losses of more than 2%.
• Newmont Mining Corp. (NYSE:NEM) was nearly 0.5% lower.
• NovaGold Resources (AMEX:NG) was between 2.6% and 2.9% lower.

Silver mining shares also were sustaining losses.

• Coeur d’Alene Mines Corp. (NYSE:CDE) was moving lower, down nearly 1.9%.
• Hecla Mining (NYSE:HL) was down more than 2.5%.
• Pan American Silver Corp. (NASDAQ:PAAS) was nearly 1% lower.
• Silver Wheaton Corp. (NYSE:SLW) was showing losses of about 1.8%.
• Silver Standard Resources Inc. (NASDAQ:SSRI) was down more than 3.5%.

As of this writing, Andrew Burger did not hold a position in any of the aforementioned securities.