Gold futures dropped on Thursday to log their lowest settlement since 2009, as the metal succumbed to a soaring dollar.

A rally in the greenback came on the heels of the first interest-rate hike by the Federal Reserve in nearly 10 years, weighing on dollar-denominated metals.

Shortly after gold prices settled in regular trading in New York on Wednesday, the Federal Open Market Committee, led by Fed Chairwoman Janet Yellen, raised its fed-funds rate to a range of 0.25% to 0.5%, putting an end to a seven-year run of near-zero interest rates.

Read: Why Fed interest-rate hike may not melt gold

February gold US:GCF6 sank $27.20, or 2.5%, to settle at $1,049.60 an ounce after touching a low of $1,046.80. Prices saw their lowest settlement level since October 2009, based on the most-active contracts. They settled 1.4% higher on Wednesday, ahead of the Fed decision.

March silver US:SIH6 dropped 54.5 cents, or 3.8%, to $13.703 an ounce, following a 3.5% climb a day earlier.

The day’s selloff for gold was characterized as a knee-jerk reaction to the “rate hike filtering through the credit markets, and the impact it…had on the U.S. dollar,” said Brien Lundin, editor of Gold Newsletter.

Read:Federal Reserve ‘dot plot’ still signals 4 interest-rate hikes in 2016

Higher interest rates tend to make precious metals that don’t bear interest rates less attractive for investors. They also boost the dollar, which was up 0.7% against the euro EURUSD, -0.02% . When the U.S. dollar strengthens, it can make dollar-priced assets more expensive for buyers using other currencies.

But “the Fed’s move is the bell ringing the end to the long-standing, short-gold momentum trade that has weighed on the metal since the announcement of ‘unlimited’ QE3 in September 2012,” said Lundin. “In other words, I think the Fed’s decision to finally move will be bullish for gold over the longer term, by getting past the issue that speculators have used as an excuse to short the metal.”

Rick Rule, chairman of Sprott U.S. Holdings, said that “if the economy ‘takes the hike’ well—meaning that higher rates don’t effect home and new car sales, or effect debt and equity markets—then the dollar likely continues strong, and gold continues soft.”

On the other hand, “if the Fed can’t raise rates again, or if this hike fails, then the dollar trades off, and gold strengthens materially,” he said.

Read:When the Fed hikes rates, stocks and other assets do surprisingly well

Across other metals complex, March copper US:HGH6 shed 2.8 cents, or 1.4%, to $2.044 a pound. January platinum US:PLF6 fell $31.30, or 3.6%, to $844.70 an ounce and March palladium US:PAH6 fell $14.50, or 2.5%, to $557.45 an ounce.