Gold slumps after Fed's statement

Gold futures on the COMEX division of the New York Mercantile Exchange fell Thursday as the U.S. Federal Reserve delivered an upbeat message to investors.

The most active gold contract for April delivery lost 31.3 U.S. dollars, or 2.43 percent, to settle at 1,255.90 dollars per ounce.

After the market's close Wednesday, the Federal Reserve told investors that the American economy was expanding "at a solid pace. " This signaled to investors that a future interest rate rise was still on-track. The U.S. central bank, however, also said that it would be patient when deciding on the exact timing of the interest rate rise. Some analysts believe that the Fed could raise interest rates as early as June, which was supportive to U.S. equities and the dollar.

In reaction to the Fed's announcement, the Dollar Spot Index rose by 0.38 percent to 94.8280 Thursday. The index is a measure of the dollar against a basket of major currencies. Gold and the dollar typically move in opposite directions, which means if the dollar goes up, the prices of gold futures go down.

Gold's fall may have been exacerbated by a much better-than- expected weekly jobless claims report issued by the U.S. Department of Labor, showing jobless claims falling by 43,000 to 265,000. However the Labor Department warned that initial jobless claims data are often volatile after the Martin Luther King Jr. federal holiday in the United States, and analysts believe the data are an outlier.

Silver for March delivery dropped 131.5 cents, or 7.27 percent, to close at 16.773 dollars per ounce. Platinum for April delivery lost 41.2 dollars, or 3.27 percent, to close at 1,217.30 dollars per ounce.