Profit-taking sent COMEX gold down 2 percent Thursday morning as the dollar strengthened after the Federal Reserve took a cautious rhetorical step toward raising US interest rates for the first time since 2000.
"If interest rates move higher, the dollar gets stronger and gold gets weaker," said a bullion trader.
The Federal Open Market Committee held rates steady at its two-day monetary policy meeting, which concluded Wednesday after metals trading had wrapped up for the day.
This shored up the beleaguered dollar against the euro and frayed a mainstay of the bull market in gold.
At 10:15 am EST (1515 GMT), gold for April delivery was down $9.40 at $406.40 an ounce, trading from $412.50 to $404.80. That reversed Wednesday's $4.50 gain and came within 50 cents of Tuesday's 6-week low at $404.30.
Spot gold was at $406.20/95, down from $410.20/0.80 late Wednesday and London's morning fix at $410.15.
COMEX March silver was down an even sharper 3.8 percent, or 25.5 cents, at $6.375 an ounce, trading $6.565 to $6.26. The silver market is much less liquid than gold, and has been volatile since 6-year highs were hit early this month. Spot silver was at $6.35/37, down from the close at $6.51/53. The fix was $6.535.
NYMEX April platinum was down $14.10 at $836.00 an ounce. Spot was quoted at $841.00/846.00. March palladium was $7.90 lower at $240.50 an ounce. Spot was indicated at $232.00/238.00.
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