NEW YORK (AP) -- Gold plunged below $1,300 an ounce for the first time since September 2010 after the Federal Reserve said it might start to slow down its bond-buying program later this year.
Gold for August delivery dropped $87.80, or 6.4 percent, to $1,286.20 an ounce Thursday. July silver plummeted $1.80, or 8.3 percent, to $19.823 an ounce.
The prospect of less economic stimulus from the Fed greatly diminished the appeal of gold and silver as insurance against inflation and a weak dollar. Traders worried that both could have been a byproduct of the Fed's stimulus program. The dollar has risen sharply against other currencies since the Fed made its announcement Wednesday.
In other metals trading, copper for July delivery fell 7.9 cents, or 2.5 percent, to $3.062 a pound. July platinum fell $60.10, or 4.2 percent, to $1,363.80 an ounce. Palladium for September delivery fell $31.30, or 4.5 percent, to $665.10 an ounce.
Energy prices also fell sharply. Crude oil dropped by $2.84, or 2.9 percent, to finish at $95.40 a barrel in New York, its biggest drop since November. In addition to the Fed news, energy traders were also reacting to a slowdown in manufacturing in China.
Wholesale gasoline fell 10.5 cents, or 3.6 percent, to finish at $2.79 a gallon. Heating oil fell 10 cents, or 3.4 percent, to end at $2.87 per gallon. Natural gas retreated by 9 cents, or 2.2 percent, to finish at $3.88 per 1,000 cubic feet.
Crop prices ended lower. The actively traded December contract for corn fell 10 cents to $5.605 a bushel. November soybeans fell 25.75 cents to $12.85 a bushel and July wheat fell 6.5 cents to $7.005 a bushel.