Gold, Silver Slide on Prospects for A Fed Pullback

NEW YORK (AP) -

Gold and silver futures fell sharply on Thursday, as a budget deal and a brighter outlook on the U.S. economy appeared to strengthen the case for the Federal Reserve to start easing back on its stimulus.

Gold slumped $32.30, or 2.6 percent, to $1,224.90 an ounce. Silver slid 90.3 cents, or 4.4 percent, to $19.453 an ounce.

Investors interpreted the budget agreement, as well as encouraging reports on retail sales and unemployment claims, as increasing the likelihood that the Fed will reduce its bond purchases.

Gold, which traders see as a hedge against inflation and a weaker U.S. dollar, has been falling, as the prospect of a wind-down in the Fed’s program has become more likely.

January platinum fell $20.80, or 1.5 percent, to $1,364.40 an ounce, and palladium for March delivery fell $18.30, or 2.5 percent, to $720.25 an ounce.

Copper for March delivery was flat at $3.2955 a pound.