Gold prices were down by more than $50 an ounce, or 3%, on Wednesday morning after the Federal Reserve cooled speculation it will engage in a fresh round of quantitative easing. A stronger U.S. dollar also weighed on precious metals.

Gold ETFs such as SPDR Gold Shares (NYSEArca: GLD), iShares Gold Trust (NYSEArca: IAU) and ETFS Physical Swiss Gold Shares (NYSEArca: SGOL) opened lower Wednesday after losing nearly 2% the previous session.

Gold futures were trading under $1,650 an ounce. On Tuesday, the Fed said the economy is picking up a little steam.

The metal is losing momentum as U.S. Treasury yields appear to be breaking out. [Shorting Treasury Bonds with ETFs]

“Knowing how dovish the Fed – especially Bernanke – is, for him to say we’re seeing growth is surprising. So removal of quantitative easing and a higher rates forecast is not good for gold in the near term,” said Saxo Bank senior manager Ole Hansen in a Reuters report.

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