Nov. 3 (Bloomberg) -- Gold fell the most in two weeks on bets that the Federal Reserve will announce a U.S. stimulus below estimates by economists, boosting the dollar and eroding the appeal of the metal as an alternative investment. Before today, gold gained 8.7 percent since Sept. 1, while the dollar dropped 7 percent against a basket of major currencies amid speculation that policy makers will announce another round of so-called quantitative easing to bolster the economy. The metal reached a record $1,388.10 an ounce on Oct. 14. “You’ve got nervous longs exiting this market,” said Matthew Zeman, a metal trader at LaSalle Futures Group in Chicago. “If the Fed disappoints with a smaller amount of quantitative easing, you might start to see the dollar gain, and gold is going to go down.” Gold futures for December delivery dropped $25.20, or 1.9 percent, to $1,331.70 at 11:31 a.m. on the Comex in New York. A close at the price would mark the biggest decline for a most- active contract since Oct. 19. Earlier, the metal climbed as much as 0.6 percent. The Fed has kept its benchmark interest rate at zero percent to 0.25 percent since December 2008 and purchased $1.7 trillion in Treasuries and mortgage-backed assets to spur growth. Estimates for the size of the Fed’s next round of asset purchases range from $1 trillion at Bank of America-Merrill Lynch to $2 trillion at Goldman Sachs Group Inc. Economists at both firms agree the Fed may start by announcing a $500 billion plan. An announcement is expected at 2:15 p.m. in Washington. Silver futures for December delivery dropped 74.1 cents, or 3 percent, to $24.095 an ounce. Platinum futures for January delivery fell $17.10, or 1 percent, to $1,702 an ounce on the New York Mercantile Exchange. Palladium futures for December delivery declined $8.80, or 1.4 percent, to $636.65 an ounce. --Editors: Patrick McKiernan, Millie Munshi To contact the reporter on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net. To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net.

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