Gold futures fell sharply on Wednesday to its lowest level in almost three weeks as energy costs decline, coming under pressure as the dollar rose against most other major currencies.

Gold for June delivery dropped $16.20 to end at $909 an ounce on the New York Mercantile Exchange. The precious metal hit an intraday low of $898.

On Tuesday, gold futures rose $7.60 to end at $925.20 an ounce.

Crude-oil futures fell from a record $119.90 a barrel reached yesterday, and the euro traded below $1.60. Gold climbed to a record $1,033.90 on March 17, when the euro and crude set previous records.

Gold fell on speculation the Federal Reserve will slow the pace of interest-rate cuts this year, bolstering the dollar.

Gold prices came under renewed selling pressure ... this time responding to declining crude oil and rising U.S. dollar value, said Jon Nadler, a senior analyst at Kitco Bullion Dealers, in a research note.

While the current pause is still seen as a period of consolidation, the risk of a breach of the $900 level remains in place and could take bullion to the $880/$890 area, Nadler said.

In currency trading, the dollar gained against the euro, the pound and the yen. The dollar index, which tracks the performance of the greenback against a basket of other currencies, gained 0.7 percent at 71.81.

The Energy Department reported that U.S. crude inventories rose by 2.4 million barrels in the week ending April 18, higher than analysts' expectations. Oil ended up 23 cents at $118.30 a barrel.

Also on the Nymex, May silver futures lost 55 cents to end at $17.16 an ounce and July platinum fell $18.60 to end at $2,018.80 an ounce.

June palladium lost $15.85 to finish at $447.55 an ounce. May copper futures dropped 7 cents to end at $3.90 a pound.