Investing.com - Gold prices plunged sharply to a more than two-week low on Thursday, after data showed the U.S. economy grew mostly in line with expectations in the third quarter and as the Federal Reserve signaled that a December rate hike was still on the table.
Gold for December delivery on the Comex division of the New York Mercantile Exchange tumbled $22.10, or 1.88%, to trade at $1,154.00 a troy ounce during U.S. morning hours. It earlier fell to $1,152.40, the lowest since October 9.
The Commerce Department said the economy grew 1.5% in the three months ended September 30, slightly missing expectations for growth of 1.6%. The U.S. economy expanded 3.9% in the preceding quarter.
The data showed personal consumption rose 3.2% in the third quarter, just below expectations for a 3.3% gain, and compared to a 3.6% increase in the preceding quarter.
At the same time, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits increased by 1,000 last week to 260,000. Analysts had expected jobless claims to rise by 4,000 to 263,000 from the prior week's 259,000.
First-time jobless claims have held below the 300,000-level for 33 consecutive weeks, which is usually associated with a firming labor market.
The reports mostly matched market expectations, underlining the view that the Federal Reserve will raise interest rates for the first time in nearly a decade at its December meeting.
Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.
The Fed left interest rates unchanged following a two-day policy meeting on Wednesday, as widely expected, but surprised the market with a hawkish statement, which included a direct reference to its next policy meeting.
The central bank's statement did not repeat that global risks would have a likely impact on the U.S. economy, as it warned at its prior meeting in September.
Market players have been trying to gauge when the Federal Reserve will raise interest rates for the first time since 2006 after recent economic reports offered a mixed picture of the U.S. economy.
In recent weeks, investors had pushed back expectations for a rate increase to March 2016 due to weakness in the global economy and its impact on U.S. growth prospects.
Elsewhere in metals trading, copper for December delivery on the Comex division of the New York Mercantile Exchange slumped 3.4 cents, or 1.42%, to $2.329 a pound during morning hours in New York.