Big drop for precious metals

Gold posts its biggest daily percentage drop in 13 months

Bullion prices ended lower at Comex on Thursday, 29 January 2015. Gold posted its biggest daily percentage drop in 13 months on Thursday as U.S. jobless claims fell sharply, bolstering the Federal Reserve's commitment to tightening monetary policy later in the year. A recovery in U.S. stocks and the greenback also tarnished gold's allure as a safe-haven asset.

Gold for February delivery skidded $31.30, or 2.4%, to settle at $1,254.60 an ounce.

March silver futures shed $1.32, or 7.3%, to $16.77 an ounce.

Government data showed the number of U.S. workers making first-time claims for unemployment benefits fell to 265,000 in the week ended 24 January 2015 from a revised 308,000 a week earlier. The fall was much larger than economists had expected and took initial claims to the lowest level since 2000. Economists had warned that the figures could be impacted by a reporting week shortened by the Martin Luther King Day holiday.

Gold prices had come under pressure a day earlier after the U.S. central bank continued to imply a commitment to raising interest rates around the middle of 2015.

The market place on Thursday was still digesting Wednesday's Federal Reserve's Open Market Committee statement that left U.S. monetary policy unchanged, saying the Fed remains patient on raising interest rates. However, the FOMC statement removed the considerable time wording regarding a timeframe for waiting to raise interest rates. Recent developments, including plunging crude oil prices, economic troubles in the European Union, currency market turmoil, and other countries moving to stimulate their monetary policies, have led many to believe the Fed might not be able to raise interest rates until late this year, or may have to wait until 2016.

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