West Texas Intermediate dropped as world powers held talks with Iran on its nuclear program and the dollar strengthened amid optimism that Senate leaders will reach an agreement to raise the U.S. debt limit.

Prices slid as much as 1.2 percent on Iranian proposals to end a decade-long standoff as two days of negotiations with the U.S., U.K., France, Germany, Russia and China started today in Geneva. Iran is demanding a relaxation of the international sanctions against its oil exports. The dollar advanced against the euro for the first time in three days as Senate leaders were poised to reach an agreement to halt the fiscal impasse.

WTI for November delivery declined 42 cents, or 0.4 percent, to $101.99 a barrel at 10:53 a.m. on the New York Mercantile Exchange. Trading volume was about 12 percent below the 100-day average.

Brent for November settlement, which expires tomorrow, fell 69 cents, or 0.6 percent, to $110.35 a barrel on the London-based ICE Futures Europe exchange. The more-active December contract lost 49 cents to $109.75. The front-month European benchmark was at a premium of $8.36 to WTI after narrowing for the first time in six sessions yesterday to $8.63.

The price of gold fell to three-month low on Tuesday, but the decline during the day partially offset during the U.S. session.

An important factor in the price of gold is waiting for an agreement on the resumption of the activities of the U.S. government and increase the national debt limit , and today the expectation that Republicans and Democrats will come to an agreement before the deadline of October 17 has increased .

Experts point out that the demand for physical gold continues to be a strong part of China , but declined significantly from Europe and North America, and the withdrawal of exchange-traded funds continues , adding the gold supply in low demand.

On the background of the fact that the demand for gold as a " safe haven " decreased after the market close believed in complete political deadlock in the U.S. , the price rose . U.S. senators said on Monday that the ongoing negotiations for a month on public expenditure close to the junction , which will resume the work of government institutions and the threat of default set aside for several months.

In the event that an agreement will be officially announced as early as can be expected , however , the growth of the gold price , as the market focus will return to the incentive policies of central banks , which are expected to continue. And earlier " quantitative easing " was accompanied by a strong rise in the gold price.

Another factor in reducing the price of gold has now become a significant strengthening of the dollar against major currencies , making dollar-denominated price of the relatively higher .

Stocks of the world's largest exchange-traded fund backed by gold (ETF) SPDR Gold Trust on Monday fell by 1.85 tons to 889.13 tons of four-year low , indicating a loss of investor confidence.

The cost of the December gold futures on COMEX today dropped to $ 1251.00 per ounce.

GOLD 1,275.00 7.00 0.55%

OIL (WTI) 102.13  0.11 0.11%