Gold and silver prices plummeted Wednesday as the Federal Reserve's more optimistic outlook for the economy dimmed hopes that the central bank will take additional steps to stimulate growth.
Gold for April delivery fell $51.30, or 3 percent, to finish at $1,642.90 an ounce while May silver declined $1.40, or 4.2 percent, to $32.18 an ounce. Both prices are at the lowest levels since January.
The Federal Reserve said Tuesday that it is more positive about the economic recovery than it was in January. It reaffirmed its plan to keep short-term interest rates near zero through 2014, but hasn't announced more plans to stimulate the economy.
Some investors had been hoping that the central bank would consider another round of bond purchases to aid the economy.
The Fed has conducted two bond-buying programs since 2009 try to help the economy during the recession. Both were designed to keep interest rates low and encourage economic growth. But lower interest rates also can pressure the dollar, which can grow weaker against other currencies.
Prices for most commodities rose as a result of the two programs. Since commodities are priced in dollars, a weaker dollar makes them cheaper for investors who use other currencies such as the euro or the Japanese yen.
As the economy continues to improve, there will be less of a need for the Fed to launch another bond-buying program, which will weigh on silver and gold prices, said Dave Meger, vice president of metals trading at Vision Financial Markets.
Other commodities prices also fell, largely because of the stronger dollar.
Copper for May delivery fell 5 cents to finish at $3.85 per pound, April platinum declined $26.50 to $1,675.30 an ounce and June palladium ended down $11.40 at $607.45 an ounce.
Oil prices fell slightly after the government said the nation's crude supplies rose last week as expected.
Benchmark crude declined $1.28 to finish at $105.43 per barrel on the New York Mercantile Exchange. Heating oil futures fell 0.94 cent to $3.2618 per gallon, gasoline futures fell 0.76 cent to $3.347 per gallon and natural gas ended down 1.5 cents at $2.284 per 1,000 cubic feet.
In May agricultural contracts, wheat dropped 5.25 cents to finish at $6.4375 per bushel, corn fell 3.25 cents to $6.5875 per bushel and soybeans rose 1.5 cents to $13.5025 per bushel.