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Gold Futures Settle Sharply Lower

Gold prices drifted lower on Thursday, dragging the most active gold futures contract to their lowest settlement in over six weeks.

An imminent start to tapering of the Fed's bond-buying program later this year and rising prospects of a series of interest rate hikes in 2022 and 2023 weighed on gold prices.

The rally in global stock markets amid improved risk sentiment also contributed to weak demand for the safe-haven yellow metal.

Concerns about the impact of a potential default by Chinese realty major Evergrande eased after the Chinese central bank infused 120 billion yuan into the banking system through reverse repurchase agreements, resulting in a net injection of 90 billion yuan.

Gold futures settled sharply lower despite a weak dollar. The dollar index dropped to 92.98 this afternoon, losing about 0.5%.

Gold futures for December ended down $29.00 or about 1.6% at $1,749.80 an ounce.

Silver futures for December ended lower by $0.228 at $22.679 an ounce, while Copper futures for December settled at $4.2310 per pound, down $0.0210 from the previous close.

The Fed said in the announcement of its latest monetary policy decision on Wednesday that a "moderation in the pace of asset purchases may soon be warranted" if progress towards its dual goals continues broadly as expected.

The central bank currently plans to continue its bond purchases at a rate of at least $120 billion per month but is expected to begin scaling back later this year.

During his post-meeting press conference, Fed Chair Jerome Powell indicated the central bank could begin tapering its asset purchases as soon as its next meeting in early November.

A report released by the Labor Department this morning showed first-time claims for U.S. unemployment benefits unexpectedly increased for the second straight week in the week ended September 18th.

The Labor Department said initial jobless claims rose to 351,000, an increase of 16,000 from the previous week's revised level of 335,000.

With the uptick, jobless claims climbed further off the pandemic-era low of 312,000 set in the week ended September 4th.

Economists had expected jobless claims to dip to 320,000 from the 332,000 originally reported for the previous month.

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