Gold, silver slide on prospects for a Fed pullback

Staff Writer
Columbus CEO

Gold and silver futures are sharply lower 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 Thursday. 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.

Crude oil edged up 6 cents to $97.50 a barrel.

Crop prices fell.