Gold, silver prices drop after two-day rally

NEW YORK, N.Y. – Gold and silver prices fell on Friday as investors continued to digest the Federal Reserve’s decision to keep its economic stimulus intact.

The December contract for gold fell $36.80, or 3 per cent, to $1,332.50 an ounce Friday. December silver dropped $1.37, or 6 per cent, to $21.93 an ounce.

The decline follows a stunning rally for gold and silver in the last two days, when the two metals had their biggest gains since the financial crisis. Investors made heavy bets that the Fed’s continued stimulus might cause inflation or hurt the dollar. Gold serves as a hedge against those trends.

Commodities analysts at Barclays Capital said that gold and silver’s move earlier this week was a “knee-jerk reaction” to the Fed.