Gold fell the most in 11 weeks and silver had the biggest drop in three months as a Federal Reserve policymaker said a “small taper” in stimulus may occur in October, damping investment demand for the metals.

The Fed on Sept. 18 maintained the pace of monthly bond purchases, and that marked a “borderline decision,” Fed Bank of St. Louis President James Bullard said today on Bloomberg Television’s “Bloomberg Surveillance” with Tom Keene. Yesterday, gold jumped 4.7 percent, the most since March 2009, after the Fed announcement surprised investors who expected the central bank to scale back stimulus.

“The next cycle of Fed watching has officially begun,” Steve Scacalossi, a New York-based vice president at TD Securities Inc., said in a report.

Gold futures for December delivery fell 2.7 percent to settle at $1,332.50 an ounce at 1:44 p.m. on the Comex in New York, the biggest drop for a most-active contract since July 5. The metal climbed 1.8 percent this week.

The metal has slumped 20 percent this year as some investors lost faith in the metal as a store of value amid a U.S. equity rally to a record and low inflation.

Holdings in the SPDR Gold Trust, the biggest exchange-traded fund backed by the metal, have dropped 32 percent this year.

Silver futures for December delivery fell 5.9 percent to $21.927 an ounce on the Comex, the biggest drop since June 20. Yesterday, the price surged 8 percent, the most since March 2009, on the Fed announcement. The metal led declines among 24 raw materials in the Standard & Poor’s GSCI Spot Index.

On the New York Mercantile Exchange, platinum futures for October delivery fell 2.7 percent to $1,432.60 an ounce. Trading was 44 percent above the average in the past 100 days, according to data compiled by Bloomberg. This week, the price declined 0.8 percent, the fourth straight drop.

Palladium futures for December delivery fell 2.2 percent to $721.95 an ounce.