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By Bloomberg

Gold extended the biggest slump in eight weeks on speculation the Federal Reserve is moving closer to raising interest rates.

The metal erased April’s gains on Thursday when a report showed U.S. applications for jobless benefits declined to a 15- year low. Bullion had risen earlier in the month as economists pushed back expectations for when the Fed will raise rates amid mixed U.S. economic data.

The drop in unemployment claims underscores the central bank’s outlook that drags on economic growth earlier this year were “transitory.” Higher rates curb gold’s appeal because the metal generally only offers returns through price gains.

“The market is in thrall to the economic figures that will influence the Fed,” David Govett, the head of precious metals at broker Marex Spectron Group in London, said by e-mail. The data on jobless claims gives “slight credence to the concept that the weather played a big part in the weaker figures we have seen.”

Gold futures for June delivery lost 0.4 percent to $1,177.50 an ounce at 8:06 a.m. on the Comex in New York. Prices slid 2.3 percent yesterday, the most since March 6. The contract is up 0.2 percent this week.

Metal for immediate delivery fell 0.4 percent to $1,180.25, according to Bloomberg generic pricing.

The Fed said this week that U.S. growth will rebound to a “moderate pace,” damping speculation that rate increases may be delayed until 2016.

Holdings in bullion-backed exchange-traded products rose for a third day, increasing 0.8 metric ton to 1,625.1 tons, according to data compiled by Bloomberg as of Thursday.

Silver July delivery slid 0.6 percent to $16.06 an ounce, after dropping 3.3 percent on Thursday. Prices are still up 2.5 percent this week, the most since March.

Platinum retreated 0.1 percent to $1,139.10 an ounce, while palladium lost 0.3 percent to $774.05 an ounce.