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Precious Metals Plunge as US Jobless Claims Drop

September 13, 2013 at 3:05 by Vladimir Vyun

Precious metals plunged yesterday and continued to fall today (though platinum and palladium are attempting to rally). The reason for the drop was obvious: the huge decline of US jobless claims that slumped as much as 31,000 to 292,000 last week. It seems that the data is skewed as two states were changing their computer systems and were unable to process requests for unemployment benefits. Yet the market reacted even to the unreliable data.

The positive news from the labor market reignited talks about possible tampering of quantitative easing by the Federal Reserve next week. Employment is the most important indicators for the Fed right now and the positive developments may encourage the central bank to taper stimulus. On top of that, hopes that Syria may avoid war are not supportive for precious metals either.

Futures for delivery of gold in December declined $3.1 (0.23 percent) to $1,327.5 per troy ounce as of 3:02 GMT on COMEX today. Contract for silver slipped $0.14 (0.65 percent) to $22.01 per ounce.

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