Gold futures in New York settled sharply lower on speculative profit-taking sparked by weaker oil prices and geopolitical issues, dealers said. Chart-based and currency-related selling also dragged the metal further away from Friday's one-month high, as the dollar strengthened against the euro.
"For now, gold feels comfortable at its current levels and should look to trade largely sideways as it continues to build a solid base above the $600 level," said James Moore, an analyst with TheBullionDesk.
Gold for August delivery at the COMEX division of the New York Mercantile Exchange fell $8.70 to finish at $626.10 an ounce, after trading from $634.70 to $621.90.
Ongoing trader profit taking pulled gold further away from Friday's one-month peak at $639.50, after a sell-off in energy markets put pressure on other key commodities such as metals.
Gold had climbed last week on a lower US currency, which tends to make dollar-denominated products cheaper for traders holding foreign money.
Initial chart support in benchmark August gold rests at $615 an ounce while resistance looms up at $650, said George Gero, vice president at RBC Capital Markets Global Futures.
Dealers said that political tension in north Asia, triggered by North Korea's missile test launches last week, could offer support to gold, which is viewed as a safe-haven asset.
"While there are still no breakthroughs visible in either the Iranian or the North Korean crises, traders were using the absence of news or the milder tone of the day to sell off some of the positions that had become profitable over the past two weeks," said Jon Nadler, an analyst with bullion dealer Kitco.
US crude oil sank 1.1 percent to $73.30 per barrel, extending a fall from Friday's record high at $75.78, amid expectations of progress in talks this week on Iran's nuclear program.
Iran this week will mull over proposals backed by six world powers that aim to end a nuclear stand-off with the West. Separately, Japan will seek a United Nations Security Council vote on Monday on a resolution to impose sanctions on North Korea, Kyodo news agency reported from New York, quoting UN sources.
The dollar rose 0.5 percent against the euro to $1.2725 by midafternoon. Friday, the greenback hit a one-month low as soft US jobs data tempered thoughts of a US rate hike in August.
US payrolls in June on Friday were reported to have grown by 121,000, far fewer than the 185,000 consensus forecast by economists. Analysts said the slower than expected jobs growth in June suggested the Federal Reserve may need to raise rates at a slower pace than previously thought.
Spot gold fell to $624.00/625.50 an ounce, against $629.80/631.30 late on Friday in New York. Monday's London afternoon bullion fix was at $626. TheBullionDesk's Moore said in a note that spot gold should trade in the short-term between its 50- and 100-day moving averages at $608 and $634.50.
COMEX September silver tumbled 29.5 cents or 2.6 percent to $11.11 an ounce, within a $11.41 to $10.93 range. Spot silver fell to $11.05/11.15, vs. $11.29/11.39 previously. Monday's fix was at $11.04.
NYMEX October platinum lost $13 to conclude at $1,230.70 an ounce. Spot platinum sank to $1,219/1,225. September palladium dropped $5.45 to end at $323.70 an ounce. Spot palladium last reached $314/320.