New York (CNN Business)<\/cite>The Federal Reserve surprised the market Wednesday with projections that future interest rate hikes will come a bit sooner than expected. Gold bugs in particular were disappointed. <\/p>\n

The price of gold fell 4% Wednesday and was lower again Thursday, falling below $1,800 an ounce for the first time since early May.
\nWhile it’s true that gold often rises along with inflation fears, Wall Street may have already priced in this scenario. Investors appear to be selling gold now due to expectations that the Fed is taking the threat of inflation more seriously and may move more aggressively to tamp it down. <\/p>\n

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Higher rates would be bad for gold, which would lose its luster compared to other assets including bonds that tend to benefit in a rising rate environment.<\/p>\n

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“Prospects of a further rise in yields should cap the upside potential in the yellow metal despite the rising inflationary pressures,” said Ipek Ozkardeskaya, senior analyst with Swissquote, in a report Thursday. <\/p>\n

“A sustained positive pressure on yields could send the price of an ounce substantially below the $1800 level,” she added.
\nThe Fed’s more aggressive inflation focus could lead to higher bond yields as well a stronger dollar, which are not good for gold.
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\nNaeem Aslam, chief market analyst with AvaTrade, said in a report Thursday that the gold sell-off is similar to the “taper tantrum” that took place back in 2013 when the Fed suggested it would begin to reduce the pace of bond and other asset purchases.
\nAslam said gold is now of “less attractive interest” and that if the price remains below $1,800 an ounce, the yellow metal could be vulnerable to an “intense sell-off.”<\/p>\n

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Shares of top gold miners Newmont<\/span> (NEM<\/span>)<\/span>, AngloGold Ashanti<\/span> (AU<\/span>)<\/span> and Barrick<\/span> (GOLD<\/span>)<\/span> were all lower Thursday morning too, as were gold-related exchange-traded funds such as the SPDR Gold Shares<\/span> (GLD<\/span>)<\/span> and the VanEck Vectors Gold Miners ETF<\/span> (GDX<\/span>)<\/span>.
\nWarren Buffett has recently soured on gold too. The Oracle of Omaha’s Berkshire Hathaway<\/span> (BRKB<\/span>)<\/span> disclosed earlier this year that it sold its entire stake in Barrick, after first making the investment last summer.
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