Gold prices dropped Thursday after the European Central Bank offered little hope that it will provide more stimulus to help the struggling region with its debt crisis.
The bank kept its main interest rate unchanged at 1 percent but President Mario Draghi gave no indication that the bank might offer more ways to help the troubled economy.
Investors speculated that there is less of a chance the Federal Reserve will launch another round of bond purchases if the European bank isn't taking similar action. That's because the economy in the U.S. is healthier than in Europe. Some European countries have fallen back into recession.
"If the Europeans are discussing no further stimulus, you would make the assumption that it brings credence to the idea that it's very unlikely that you would then see further stimulus here in the U.S.," said Dave Meger, vice president of metals trading at Vision Financial Markets. "Obviously, the lack of further stimulus, we all know, takes away one of the support factors behind the precious metals complex."
Gold and other commodities have been supported for months in part by the Fed's bond-buying programs, which are designed to stimulate economic growth. The programs kept interest rates low and pressured the dollar, which weakened against other currencies. Commodities are priced in dollars, so a weaker dollar makes them more of a bargain for traders who use other currencies.
Investors also were disappointed by lackluster April retail sales and a survey that showed slower growth among U.S. service companies. Many are hoping Friday's key government jobs report will shed some light on where the economy is headed.
Gold for June delivery fell $19.20 to finish at $1,634.80 an ounce and May silver dropped 63.3 cents to $29.959 an ounce.
May copper fell 5.2 cents to end at $3.7335 per pound, July platinum fell $31.30 to $1,533.10 per ounce and June palladium ended down $8.10 at $661.35 per ounce.
In other trading, natural gas prices surged after the Energy Department said that U.S. natural gas supplies increased 28 billion cubic feet last week, which was less than analysts had expected.
Natural gas rose 8.7 cents to finish at $2.34 1,000 cubic feet.
Benchmark oil fell $2.68 to end at $102.54 per barrel on the New York Mercantile Exchange. Heating oil declined 5.56 cents to $3.0869 per gallon and gasoline futures ended down 2.57 cents at $3.05 per gallon.
In July agricultural crop contracts, wheat rose 1 cent to $6.155 per bushel, corn increased 3 cents to $6.145 per bushel and soybeans fell 11.5 cents to $14.735 per bushel.