Gold drops on Iran nuclear deal

Gold futures on the COMEX division of the New York Mercantile Exchange dropped Monday as Iran clinched a deal on its nuclear program with six world powers at the weekend.

The most active gold contract for December delivery dropped 2.9 dollars, or 0.23 percent, to settle at 1,241.2 dollars per ounce.

In the interim, six-month agreement reached between Iran and the six world powers (the United States, Britain, France, China, Russia and Germany), Iran agreed to stop producing near-weapons grade uranium in exchange for a reduction of some sanctions. The deal helped ease geopolitical concerns, putting gold under pressure Monday.

The deal also unfreezes some of Iran's cash assets. It is estimated that Iran may get as much as 7 billion dollars in relief in the next six months under the interim agreement. Meanwhile, some sanctions on gold would be suspended, which will allow Iran to sell its gold reserve.

Dollar's going strong further dampened gold. Dollar climbed to a six-month high level against Japanese yen Monday.

The latest data from the U.S. Commodity Futures Trading Commission showed that hedge funds were becoming bearish on gold, and their net long position on gold has dropped to the lowest level in four months.

Silver for March delivery gained 2.5 cents, or 0.13 percent, to close at 19.926 dollars per ounce. Platinum for January delivery lost 4.9 dollars, or 0.35 percent, to close at 1,377.8 dollars per ounce.