Copper Crushed by Inventory Build

Diversified miners weren't immune either, with Rio Tinto(RTP Quote) and BHP(BHP Quote) off 4.3% and 2.6%, respectively.

In the ferrous metals sector, Soleil downgraded AK Steel(AKS Quote) to hold from buy. The stock traded down on the news, off 2.7% recently.

As for precious metals, a strong opening for gold quickly gave way to a sharp reversal after bullish economic statistics were published by the Institute for Supply Management.

Prices for February-dated contracts closed down $8.20 at $629.80 an ounce on the Comex. The exchange-traded funds that hold bars of bullion, streetTracks Gold Shares (GLD Quote) and iShares Comex Gold Trust(IAU Quote), were both losing about 1.2%.

The ISM index grew to 51.4 for December, compared to a consensus forecast of 50 and a November reading of 49.5. A figure above 50 points to a growing manufacturing sector, and currency traders took the new data as an excuse to dump gold.

"The buying quickly turned into profit-taking on the release of the ISM data," notes James Moore, an analyst at the TheBullionDesk.com, in a daily market brief. "Today's movements reflect the current sensitivity to the dollar, although [price] dips have found good buying interest."

The greenback was recently gaining, with one dollar buying 119.36 yen, up from 118.81 yen late in the prior session. The euro was buying $1.3166, down from $1.3279 previously. Gold prices tend to move inversely with those of the dollar.