Gold declined the most in two weeks on speculation that the Federal Reserve will tighten U.S. monetary policy, curbing demand for the precious metals as alternative investments.

U.S. employers added more jobs than forecast in March and the unemployment rate unexpectedly declined to a two-year low, a government report showed today. The improving economy encouraged Fed policy makers last month to signal they probably won’t extend bond purchases beyond June.

“We will most likely see mounting pressure on the Fed to start curbing liquidity should macro data continue improving,” Andrey Kryuchenkov, an analyst at VTB Capital in London, said in a report. “Rising interest rates increase the opportunity cost of holding non-interest-bearing bullion.”

Gold futures for June delivery dropped $11, or 0.8 percent, to settle at $1,428.90 an ounce at 1:45 p.m. on the Comex in New York, the biggest drop since March 15.

Fed Bank of Richmond President Jeffrey Lacker said yesterday that the central bank should review reducing its planned purchase of $600 billion in Treasuries because of improving economic data.

Gold fell on “better-than-expected non-farm payrolls, which signal improving economic conditions,” said Bayram Dincer, an analyst at LGT Capital Management in Pfaeffikon, Switzerland.

Haven Demand

Last week, gold climbed to a record of $1,448.60 as fighting in Libya, Japan’s nuclear crisis and European-debt concerns boosted demand for an investment haven. In the first quarter, the price climbed 1.3 percent, marking the 10th straight gain, the longest rally since at least 1975. The metal has advanced 27 percent in the past 12 months.

Silver futures for May delivery fell 15.6 cents, or 0.4 percent, to $37.732 an ounce. The price has more than doubled in the past 12 months.

Palladium futures for June delivery rose $7.15, or 0.9 percent, to $775.05 an ounce, the fourth straight gain. The price has climbed 58 percent in the past 12 months.

Platinum futures for July delivery declined $6.30, or 0.4 percent, to $ 1,776.90 an ounce. The price has advanced 6 percent in the past 12 months.