Gold price hammered after jobless claims fall to 43-year low

Gold was punished on Thursday, as interest rate hikes by the Federal Reserve were put back on the table following some of the best employment data out of the US in decades.

Traders in gold futures in New York slashed the price of gold for delivery in June, the most active contract, to a low of $1,225.40 an ounce in late trade, down 1.8% or almost $23 from yesterday's close. Gold hit a 13-month high of $1,274 an ounce March 10 and remains up nearly 15.6% in 2016.

Earlier on Thursday, data showed that weekly US jobless claims fell to 253,000. That compares to more than 600,000 at the height of the global financial crisis and the lowest mark since 1973.

The strong reading strengthens the position of hawks on the Fed's decision making committee with predictions of a rate hike in December (which would only be the second in a decade) jumping to a 57% chance from less than even earlier this week.

Higher rates boosts the US currency  and the dollar index advanced to a two-week high  above 95 against a basket of the world's major currencies after the release of the data.

Commodities priced in US dollar usually have an inverse relationship to the world's reserve currency, particularly gold. The US dollar index's record high of 164.72 reached in February 1985 coincided with the bottom in the price of gold of $284.25 an ounce during that same month.