Gold fell to the lowest level since September 2010 as U.S. economic data beat estimates, backing the case for reduced stimulus from the Federal Reserve as the dollar strengthened. Silver sank to the cheapest since August 2010.

Cash bullion dropped as much as 2.3 percent to $1,248 an ounce, the cheapest since Sept. 14, 2010, and was at $1,249.13 at 10:48 a.m. in Singapore. It’s lost 22 percent since the start of April, heading for its worst quarterly performance since 1920, according to data compiled by Bloomberg. Silver retreated as much as 4.3 percent to $18.795 an ounce.

U.S. durable goods orders rose more than forecast in May, while consumer confidence for June exceeded projections, data showed. Fed Chairman Ben S. Bernanke said this month the central bank, which buys $85 billion of Treasury and mortgage debt a month, may trim purchases this year and end the program in 2014 should the economy continue to improve. This year, investors have sold gold from exchange-traded products at a record pace.

“The raft of figures that came out of the U.S. all pointed to as stronger growth pattern, which pushed the U.S. dollar higher,” David Lennox, an analyst at Fat Prophets, said by phone from Sydney. “That’s two nails in the coffin for gold: A stronger U.S. dollar and expectations that quantitative easing will be scaled back.”

Gold has fallen 26 percent in 2013, dropping into a bear market in April, as the Bloomberg U.S. Dollar Index climbed 5.1 percent. The gauge, representing 10 major currencies weighted by liquidity and trade flows, gained as much as 0.2 percent before a report that will probably confirm U.S. economic growth accelerated in the first quarter.

Goldman Forecasts

Gold for August delivery lost as much as 2.3 percent to $1,246 an ounce on the Comex in New York. Goldman Sachs Group Inc. expects the metal to end this year at $1,300, paring a previous estimate of $1,435, according to a June 23 report.

Assets in the SPDR Gold Trust, the largest bullion-backed ETP, fell to 969.5 metric tons yesterday, and are 28 percent lower this year. Total ETP holdings are heading for a sixth monthly contraction.

Analysts from Morgan Stanley to Credit Suisse Group AG cut their gold forecasts this week as bullion heads for its biggest annual decline since 1981. Morgan Stanley lowered its 2013 target to $1,409 from $1,487, while Credit Suisse expects prices at $1,150 in 12 months.