Gold Slips on Oil

Updated from 12:11 p.m. EDT

Gold fell again Monday, dragging down other metals, as tensions with Iran seemed to ease, while oil fell and the dollar rose.

Gold for August delivery finished down $9.30, or 1.6%, to $572.40 an ounce. Among other metals, silver for July delivery fell 16 cents, or 1.6%, to $9.97 an ounce

Concerns that higher interest rates might curb global growth, and therefore demand for industrial commodities, also hit copper pretty hard. The July contract dropped 13 cents, or 4.13%, to $3.08 a pound.

Fresh signs that the U.S. housing market continues to slow revived concerns about growth on Wall Street in the early afternoon. The National Association of Home Builders said its monthly Housing Market Index dropped to 42 in June from 46 the previous month, indicating that home builders have an increasingly negative outlook of the market.

Gold, which acts both as a hedge against inflation and a safe-haven asset, had surged to 26-year highs in May, as tensions with Iran had pushed the price of crude oil to $75 a barrel.

But in the latest sign of easing tensions, Iranian President Mahmoud Ahmadinejad said Friday that incentives offered by U.N. Security Council members plus Germany to induce Tehran to stop its nuclear program was a "step forward."

On Sunday, he followed up the remarks by saying "a positive atmosphere" had been created, which might allow for a resolution to the standoff, according to Reuters.

The comments eased concerns over disruption of oil supply from Iran, the world's fourth-largest producer of crude, leading the price of a barrel to fall $1.28 to $68.60 in recent action.

Meanwhile, news reports that North Korea had finished fueling a nuclear missile, the final leg necessary for a test launch, failed to provide much of a safe-haven bid for gold.

Adding to the negative bias for gold and metals, the dollar advanced following more hawkish comments from the Federal Reserve. Atlanta Fed President Jack Guynn said that while growth is starting to slow, core inflation is "beyond an acceptable range."

Uncertainty about the U.S. economic outlook and Fed policy remained intact, even after Dallas Fed President Richard Fisher later said in an interview with CNBC that while the U.S. economy may be "tapering off", the U.S. wasn't in danger of falling into a period of stagflation.

The Dollar Index, which tracks the greenback against a basket of key currencies, was recently up 0.5%. The index had dropped 7.2% between March and May amid expectations that the Fed would pause its two-year long campaign to raise rates in June, and eventually stop raising rates altogether.