Updated: 5:14 p.m. ET

Gold (-GC) dropped below $1,600 an ounce on Wednesday, reaching its lowest level since July.

There's a chance the metal could drop to as low as $1,500, especially after minutes from the January Federal Reserve meeting suggested the central bank could end its low-interest-rate policy sooner than expected. 

Stocks were affected by the metals slump and suffered their biggest losses in at least three weeks.

Gold settled at $1,578 an ounce in New York, down $26.20, or 1.6%. It fell below $1,560 an ounce in electronic trading after the close of New York trading. Most global trading in gold is done electronically. The loss was gold's fifth straight and its longest losing streak since December 2011. It's down 5.8% this year.

Silver (-SI) and platinum (-PL) suffered even larger losses, and exchange-traded funds were also taking hits. Silver dropped 80 cents, or 2.8%, to $28.62, and is down 5.3% this year. Platinum slid $50.40, or 3%, to $1,647.10. It is up 6.8% in part because of shortages due to strikes at South African mines. Stocks also moved lower."While I remain a long-term bull on gold prices, I have also come to the realization that gold prices may be locked in a corrective cycle for quite some time," Michael Sacchitello, a technical analyst at Stone & McCarthy Research Associates, told The Wall Street Journal.

One reason for gold's decline was bullishness about the U.S. economy among many investors, despite worries that rising gasoline prices and higher interest rates could dampen consumer spending and the larger economy. A strengthening economy would draw money from gold as investors sought higher returns.

Home builders broke ground in January on the most U.S. single-family homes in more than four years. Permits for future construction also rose, the Commerce Department reported on Wednesday.

"The economic data is telling us that the economy is definitely showing signs of improvement," money manager Vedant Mimani told Bloomberg News.

Also pushing gold lower: a strengthening dollar against the yen, euro and British pound. The U.S. Dollar Index, which tracks the greenback against a basket of currencies, was at 80.815, up 0.3% for the day. It's also up 2% in February.

Gold and other precious metals prices often move lower when the dollar is stronger.

A third pressure: Gold's 50-day moving average could fall below its 200-day moving average, a phenomenon called a "death cross." That could a signal that gold will fall still further.

Gold's peak price intraday was $1,917.90 an ounce on Aug. 23, 2011. Its peak close was $1,891.90 on Aug. 22, 2011. It began the millennium at $283 and had its first close above $1,000 on March 17, 2008.

Meanwhile, the SPDR Gold Shares (GLD) ETF dropped $3.89 to $151.44. The ETF is down about 2.8% this week and 6.5% on the year. The iShares Silver Trust (SLV) was down 85 cents to $27.59. It's down 9.4% in February and 6.1% this year.

Newmont Mining (NEM), the largest U.S. gold miner, was off $2.34 to $40.56. Freeport-McMoRan Copper & Gold (FCX) was down $2.04 to $32.22.

The Fed minutes accelerated gold's slump and weighed on stocks as well. The Dow Jones industrials ($INDU) were down 108 points to 13,928. The Standard & Poor's 500 Index ($INX) had dropped 19 points to 1,512, and the Nasdaq Composite Index ($COMPX) had fallen 49 points to 3,164.

The Dow's loss was its largest since Feb. 4. The S&P 500 suffered its largest decline since Nov. 14. Nasdaq absorbed its biggest loss since Nov.7.

Google (GOOG), which had closed Tuesday above $800 for the first time, fell back $14.39 to $792.46. Apple (AAPL) fell $11.14 to $448.85.

The minutes suggested that a lively debate has emerged among policy makers on the Federal Open Market Committee, the Fed's policy making body. The Fed is officially pursuing a policy of so-called quantitative easing. That means it is buying some $85 billion a month in Treasury and mortgage-backed securities to keep longer-term rates low. It expects low rates into 2015.

The target for so-called federal funds -- what banks lend each other on an overnight basis -- is 0% to 0.25%. Just about all domestic interest rates derive from the fed funds rate.

The minutes, however, show a policy that is at least being examined closely.  Some FOMC members worried it could reignite inflation beyond the Fed's stated goal of 2% a year. Others wanted the Fed to vary its purchases depending on financial market conditions. Still others warned that changing the policy abruptly and letting rates rise quickly could derail the economy.

The Fed's low-rate policy has pushed U.S. mortgage rates to around 3.7% -- while a four-year auto loan rate is around 2.9%, according to Bankrate.com. Getting approvals on home mortgages continues to be difficult. The 10-year Treasury yield, which directly influences mortgage rates, is about 2.04%, up from 1.76% on Dec. 31.

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