Crude oil dropped as much as 2.9 percent to $128.42 a barrel after reaching a record $135.09 on May 22. Before this week, gold had gained 40 percent in the past year as the price of oil doubled. The metal reached a record $1,033.90 an ounce on March 17.
Gold futures for June delivery dropped $17.90, or 1.9 percent, to $907.90 an ounce on the Comex division of the New York Mercantile Exchange, the biggest percentage drop for a most-active contract since April 29.
Silver futures for July delivery plummeted 82.5 cents, or 4.5 percent, to $17.465 an ounce. The drop was the biggest since March 20.
Gold still has climbed 8.3 percent this year, while silver has gained 17 percent.
The dollar's rebound also damped 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.