PRECIOUS-Gold drops 2.6 percent on Syria plan, Fed taper worries
* Selling quickens as prices break below key moving averages
* U.S. gold futures briefly paused to prevent large movement
* U.S. jobless claims down last week but implication clouded
(Adds trader comment, second byline, dateline, updates market activity) NEW YORK/LONDON, Sept 12 (Reuters) - Gold prices fell 2.6 percent on Thursday, set for their biggest one-day drop in more than two months, weighed down by easing of tensions with Syria and worries the U.S. Federal Reserve may unwind its monetary stimulus. Silver tumbled 4 percent and platinum group metals also fell in tandem with gold's slide. Bullion's safe-haven appeal declined after Syria accepted a Russian proposal earlier this week to give up chemical weapons. On Thursday, U.S. Secretary of State John Kerry flew to Geneva to hear Russia's plans to disarm Syria of its chemical weapons and avert U.S.-led military strikes. Also weighing on gold was data showing U.S. jobless claims fell sharply last week. However, analysts said the decline appeared due to technical problems in claims processing, clouding the last major reading of labor market health before the Fed meets to consider reducing its stimulus for the economy.
"We've already had Syria tension easing, and there is more of a case for stimulus tapering now with the economic numbers coming out better," said Thomas Capalbo, precious metals broker at futures brokerage Newedge. Consensus is building among analysts that the Federal Open Market Committee next week could begin to slash its $85 billion monthly bond purchases. However, the unclear jobless claims data and disappointing U.S. nonfarm payrolls data last week complicate an otherwise rosy economic outlook. The FOMC is set to release a policy statement at the end of its two-day meeting next Wednesday. Spot gold dropped 2.6 percent to $1,331.10 an ounce one-day fall since June 26. Earlier, the metal hit $1,326.05, its weakest since Aug. 15. For the week, bullion is on track to slip more than 4 percent for its biggest weekly decline since the last week of June. Selling pressure picked up after the metal broke through its 100-day moving average at $1,355 an ounce and its 50-day moving average at $1,335, traders said. U.S. gold futures for December delivery were down $32.70 an ounce to $1,331.10. Gold futures trading was momentarily halted for 20 seconds at 2:54 a.m. EDT by CME Group's Stop Logic mechanism. Reuters data showed an unusually heavy 4,300 contracts changed hands in the minute prior to the pause. Stop Logic is aimed at preventing large price movements from cascading stop-price orders, an order to sell or buy a security when it reaches a particular price. It also allows participants to provide additional liquidity. Among other precious metals, silver was trading down 4.2 percent at $22.18. It has lost nearly 7 percent so far this week. Platinum dropped 2 percent to $1,436.24 an ounce, while palladium fell 0.1 percent to $689.50 an ounce. Prices at 12:03 p.m. EDT (1603 GMT)
LAST NET PCT YTD CHG CHG CHG US gold 1331.10 -32.70 -2.4% -20.6% US silver 22.245 -0.009 -4.0% -26.4% US platinum 1440.00 -33.50 -2.3% -6.4% US palladium 692.15 0.95 0.1% -1.6% Gold 1331.10 -35.04 -2.6% -20.5% Silver 22.18 -1.02 -4.2% -26.8% Platinum 1436.24 -29.36 -2.0% -6.6% Palladium 689.50 -1.00 -0.1% -1.8% Gold Fix 1328.00 -12.25 -0.9% -20.2% Silver Fix 22.67 -24.00 -1.0% -24.3% Platinum Fix 1444.00 17.00 1.2% -5.2% Palladium Fix 690.00 4.00 0.6% -1.3%
(Reporting by Frank Tang and Jan Harvey; Additional reporting