Gold futures closed down almost $18 an ounce on Tuesday, dropping the most in four weeks as energy costs fell and lowered the demand for the contract as a hedge against inflation.
Gold for June delivery fell to a low of $922 an ounce on the New York Mercantile Exchange. The precious metal finished $17.90, or 1.9 percent, lower at $907.90, making it the biggest percentage drop for a most-active contract since April 29.
The contract closed last week at $925.80, up almost $26 from a week earlier.
Gold was up 3 percent last week and silver surged nearly 8 percent, and thus profit-taking would be expected in the early part of this week, said Mark O'Byrne, a director at Gold and Silver Investments Ltd.
The dollar index, which tracks the greenback against a basket of six major currencies, was up 0.3% to 72.213. The dollar's rebound also lowered the demand for precious metals. The dollar rose as much as 0.4 percent against the euro today after dropping 2.1 in the three weeks ended May 23.
Meanwhile, crude oil dropped as much as 2.9 percent to $128.42 a barrel after reaching a record $135.09 on May 22.
Silver futures for July delivery plummeted 83 cents, or 4.5 percent, to $17.46 an ounce. The drop was the biggest since March 20.
Also on the Nymex, July platinum fell $48.20, or 2.2 percent, to close at $2,128.10 an ounce while June palladium shed $13.35 to end at $443.95 an ounce on Nymex. July copper lost 2 cents to finish at $3.72 a pound on Nymex.