Gold falls to multi-year lows after Japan's surprise easing

Gold futures on the COMEX division of the New York Mercantile Exchange fell sharply on Friday as Japan's central bank unexpectedly introduced a plan to pump more money into the economy.

The most active gold contract for December delivery lost 27 U.S. dollars, or 2.25 percent, to settle at 1,171.6 dollars per ounce.

The Bank of Japan, Japan's central bank, announced on Friday that it would begin adding more money to the Japanese economy by purchasing government debt. The surprised move drove traders to step up buying U.S. equities and the dollar and move away from safe-haven gold..

The U.S. dollar hit its almost 7-year highs against the Japanese yen on Friday, pushing the U.S. dollar index, a measure of the dollar's strength against six rival currencies, to fresh 4- year highs. Gold is traded in dollar and becomes more expensive for buyers who use other currencies.

In addition, a report from the University of Michigan showed consumer sentiment at its highest level since July 2007. The index is at 86.9, compared to September's reading of 84.6. This also put pressure on gold.

Silver for December delivery lost 31.4 cents, or 1.91 percent, to close at 16.106 dollars per ounce. Platinum for January delivery lost 10.7 dollars, or 0.86 percent, to close at 1,235.2 dollars per ounce.