Gold settled more than 2 percent lower on Thursday, while silver fell more than 6 percent and platinum more than 3 percent as the U.S. Federal Reserve signaled it was still on track to lift interest rates this year.
In Wednesday's policy statement, the Fed said the U.S. economy was expanding "at a solid pace", but reiterated it would be patient in deciding when to increase benchmark borrowing costs.
"The short-term reaction to the Federal Reserve is all of a sudden, people saying they could raise rates as soon as June. That's what's turned gold down here," said Bill O'Neill, co-founder of commodities investment firm LOGIC Advisors in Upper Saddle River, New Jersey.
O'Neill said June was when many had expected a rate hike but that before the Fed's statement on Wednesday there had been a recent shift of expectations to later in 2015 or even 2016.
The prospect of higher U.S. rates could encourage investors to pull back from the metal, a non-interest-bearing asset.
U.S. gold for April delivery closed down $31.30, at $1,255.90 an ounce. Spot gold fell to a two-week low of $1,251.86 an ounce and was last down 2.2 percent at $1,257.