Gold and silver prices fell Thursday as the dollar rose and traders anticipated that the Federal Reserve may reduce its economic stimulus sooner than some had expected.
Gold for December delivery fell $25.60, or 1.9 percent, to $1,323.70 an ounce. Silver fell even more. The actively traded December contract fell $1.116, or 4.9 percent, to $21.867.
The Fed, in a policy statement released Wednesday, signaled that it thinks the U.S. economy is improving. That led traders to think it may curtail its $85 billion in monthly bond purchases sooner than expected.
That would have the effect of raising interest rates and increasing the value of the dollar — two factors that weigh on gold prices.
Gold is down 21 percent so far this year and is on track to have its first annual loss since 2000. Gold rallied as high as $1,900 in August 2011. It has been steadily losing ground as fears that the Fed's massive economic stimulus program would cause inflation never materialized.