Gold futures dropped the most in nearly nine months on Wednesday as the dollar rose against a basket of other major currencies, reducing the investment appeal of gold.

Gold futures for February delivery tumbled $20.60, or 2.3 percent, to close at $882.0 an ounce on the New York Mercantile Exchange. It hit a high of $901.00 during day trading. Earlier in the session, the February contract had dropped as much as 3 percent to $875, marking the weakest level since January 10.

On Tuesday, gold closed down 80 cents at $902.6 after reaching a record breaking high of $916.10 during intra-day trading.

The dollar index, which tracks the value of the greenback against a basket of other major currencies, rose for the first time in five days. The US currency rose as much as 1.4 percent against the euro on speculation the European Central Bank will join the Fed in cutting interest rates later this year.

Gold is often viewed as an alternative to holding the dollar, making the precious metal move in the opposite direction of the U.S. currency.

The euro fell to $1.4652 against the U.S. currency.

Also on the Nymex, silver futures for March delivery dropped 40.5 cents, or 2.5 percent, to $15.895 an ounce. The percentage drop was the most in a month. The metal gained 15 percent last year. Copper lost 5.15 cents to $3.19 a pound.