(Bloomberg) -- Gold declined for the third time in four days as U.S. economic data reinforced concern that the Federal Reserve will begin trimming stimulus measures, curbing demand for precious metals as a haven.
The U.S. expanded at 3.6 percent rate in the third quarter, up from an initial estimate of 2.8 percent, while jobless claims unexpectedly declined to the lowest level in more than two months as of Nov. 30, separate government reports showed today. Fed policy makers signaled last month that the labor market will probably improve enough to warrant slowing their $85 billion of monthly bond purchases.
“The economic data and jobless claims are another indication that the U.S. is on the right track,” Phil Streible, a senior commodity broker at R.J. O’Brien & Associates, said in a telephone interview from Chicago. “Tapering is clearly becoming a possibility.”
Gold futures for February delivery dropped 1.9 percent to $1,223 an ounce at 9:48 a.m. on the Comex in New York. Prices touched $1,210.80 yesterday, the lowest since July 5.
The metal tumbled 26 percent this year through yesterday, heading for the first annual drop in 13 years. Some investors lost faith in the precious metal as a store of value amid a rally in equities and as inflation remained low.
Bullion rose 70 percent from December 2008 to June 2011 as the central bank pumped more than $2 trillion into the financial system. The Fed next meets on Dec. 17-18.
Silver futures for March delivery slumped 2.5 percent to $19.33 an ounce on Comex.