Gold futures capped the biggest decline in three weeks as a stronger dollar and plunging energy prices curbed demand for the metal. Silver plunged the most in 17 months.

Benchmark Brent crude yesterday fell the most in more than three years after the 12-nation Organization of Petroleum Exporting Countries kept its output target unchanged, cutting golds appeal as an inflation hedge. The dollar rose to a five-year high against a basket of 10 currencies on speculation that lower energy prices will boost the U.S. economy, paring demand for bullion as an alternative investment.

Gold is heading for a second straight annual loss, the longest slump since 1998, after the dollar strengthened and inflation failed to accelerate this year. Societe Generale SA trimmed its price forecast for bullion this week, saying the Federal Reserve will boost interest rates by mid-2015 as U.S. economic growth improves.

Gold futures for February delivery fell 1.8 percent to settle at $1,175.50 an ounce at 12:51 p.m. on the Comex in New York, the biggest decline since Nov. 5. Floor trading was shut yesterday for Thanksgiving.

Source: Bloomberg