Spot gold fell on Wednesday after the Federal Reserve said it will make a fourth $10 billion cut in its monthly bond purchases to $45 billion because it thinks the U.S. job market needs less help from the Fed.
It is also reaffirmed its plan to keep short-term interest rates low to support the economy "for a considerable time" after its bond purchases end, likely late this year.
Spot gold dropped 0.5 percent to $1,289 an ounce after touching a high of $1,297.40 earlier. Prior to the announcement, for June delivery settled 40 cents lower at $1,295.90 an ounce.
Chart: Precious Metals
Loose monetary policy, coupled with prolonged low interest rates, which cut the opportunity cost of holding non-yielding bullion above other assets, had been important factors driving gold higher in recent years.
Meanwhile, hundreds of pro-Moscow separatists stormed government buildings in one of Ukraine's provincial capitals on Tuesday and fired on police holed up in a regional headquarters, a major escalation of their revolt despite new Western sanctions on Russia.
Geopolitical tensions usually increase gold's appeal as a safe-haven asset. Gold has gained from rising Ukraine tensions this year, but this has been offset by strong economic data.
—The Associated Press contributed to this report