Gold futures fell the most in 13 months and silver posted the biggest plunge since June 2013 as signs of a robust U.S. labor market cut demand for haven assets.
The two most-traded gold options were bets on further declines, and prices for the contracts doubled. Aggregate futures trading was 79 percent above the 100-day average for this time of day, with silver 70 percent higher, data compiled by Bloomberg show.
The fewest Americans in almost 15 years filed applications for unemployment benefits in the week ended Jan. 24. Economic activity œhas been expanding at a solid pace, Federal Reserve officials said in a statement on Wednesday. The outlook is lowering the appeal of precious metals, which rallied this year amid speculation that the U.S. central bank would wait longer to raise interest rates because of slowing foreign economies.
On the Comex, gold futures for April delivery dropped 2.4 percent to settle at $1,255.90 an ounce at 1:40 p.m. in New York, the biggest decline for a most-active contract since Dec. 19, 2013.
Source : Bloomberg