Gold futures tumbled as much as $28 an ounce on Thursday, the most in nearly six weeks after the dollar continued to climb, lowering the appeal of the precious metal as an alternative investment while oil prices dropped.

Gold futures for August delivery dropped $23.30, or 2.6 percent, to $881.70 an ounce on the Comex division of the New York Mercantile Exchange. The contract hit an intraday low of $872.10 an ounce, the lowest level since May 15. The metal fell for the third straight day. The price reached a record $1,033.90 on March 17.

The dollar gained as much as 0.8 percent against a weighted basket of the euro, yen and four other major currencies on speculation that the Federal Reserve may begin to raise U.S. borrowing costs this year to curb inflation. After seven interest-rate cuts since September, the dollar has hit an all-time low against the euro and gold.

Today's economic platter of statistics offers rich pickings for those who read the tea leaves therein in order to gauge the current tilt in the U.S. economy, said Jon Nadler, a senior analyst at Kitco Bullion Dealers, in a note to clients.

The dollar index, which tracks the greenback against a basket of six major currencies, was at 73.03.

Crude oil for July delivery fell sharply, off $4.08, or 3.1 percent, at $126.90 a barrel, on increased supply concerns.

Also on the Nymex, silver futures for July delivery fell 90 cents, or 5.2 percent, to $16.515 an ounce, the biggest drop since March 20.

July platinum fell $76.90, or 3.7 percent, to $1,990 an ounce while June palladium shed $9.50 to $426.75 an ounce. July copper fell 13 cents to trade at $3.56 a pound.