Gold fell around 2 percent on Thursday, its biggest one-day drop in nearly three weeks, after the European Central Bank dashed hopes of more-dramatic action to fight the region's debt crisis. Gold initially rose 1 percent after the ECB cut interest rates and said it would offer banks long-term funds.
However, the rally quickly fizzled after ECB President Mario Draghi doused expectations the bank would ramp up its bond buying. Spot gold fell 1.9 percent to $1,707.69 an ounce by 3:01 pm EST (2001 GMT), its biggest daily decline since November 21. Spot silver was down 2.9 percent at $31.55 an ounce. US gold futures for February delivery settled down $31.40 at $1,713.40 an ounce. Volume was in line to surpass its 30-day norm, bucking a trend of weak turnover in the last several sessions. Among platinum group metals, platinum was down 2 percent at $1,489.75 an ounce, and palladium was 0.4 percent lower at $670.21 an ounce.