Gold futures tumbled the most in nine weeks after a report showed U.S. jobless claims last week dropped to the lowest since April 2006, boosting speculation that the Federal Reserve will scale back fiscal stimulus soon.
First-time claims for unemployment insurance fell to 292,000 in the week ended Sept. 7, government data showed. Analysts forecast 330,000. A Bloomberg survey on Sept. 6 showed that the Fed will reduce bond purchases by $10 billion this month. Gold rose to a three-month high on Aug. 28 on concern that the U.S. would launch an attack against Syria. Prices fell 0.7 percent last week as fears of a strike diminished.
“The momentum has been about the economy improving, and today’s job data was another reason why people think the tapering may happen,” Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago, said in a telephone interview. “The war premium is also coming off.”
Gold futures for December delivery fell 2.4 percent to settle at $1,330.60 an ounce at 1:45 p.m. on the Comex in New York, the biggest drop for a most-active contract since July 5. Earlier, the metal touched $1,325.60, the lowest since Aug. 15.
Prices have dropped 21 percent this year as an equity rally and low inflation eroded demand for the metal as a store of value.
Last month, gold gained 6.3 percent on escalating Syrian tensions. The U.S. and Russia met today to discuss a plan for the Middle Eastern nation to surrender its chemical weapons, potentially averting a military strike from the U.S.
On the New York Mercantile Exchange, platinum futures for October delivery dropped 2.1 percent to $1,442.70 an ounce. The price fell for the fourth straight day, the longest slump since mid-March. Trading was 39 percent above the average in the past 100 days, according to Bloomberg data.
Palladium futures for December delivery rose 0.2 percent to $692.80 an ounce, advancing for the second time in three days.
To contact the editor responsible for this story: Steve Stroth at firstname.lastname@example.org