Gold futures fell, erasing this year’s gain, on speculation that an improving U.S. labor market will boost the case for the Federal Reserve to raise U.S. interest rates.
Fewer Americans than forecast filed applications for unemployment benefits last week, dropping the average in the past month to the lowest in 15 years, government data shosed on Thursday. An expanding economy gives policy makers more to room to raise rates, which curb gold’s appeal because the metal generally only offers returns through price gains.
Gold futures for June delivery fell 0.7 percent to settle at $1,182.20 an ounce at 1:49 p.m. on the Comex in New York, the biggest drop for a most-active contract since April 30. The price has dropped 0.2 percent this year and is down 9.6 percent from the 2015 high of $1,307.80 on Jan. 22.