The continuing fiscal crisis affecting the eurozone, coupled with the alterations in Italy's political landscapes along with brewing conflicts in the Middle East, led prices of crude oil to withdraw on Monday.

Light sweet crude for delivery in December in New York slumped 85 U.S. cents to $US98.14 a barrel after hitting a near four-month record high of $U.S. 99.69 earlier in the day.

Brent North Sea crude for December dropped $2.27 to $111.89.

Analysts pointed to international concerns on Iran's nuclear motivations as the culprit that led oil futures to rise in recent days.

In a report last week, the International Atomic Energy Agency (IAEA) said there was "credible" intelligence reports Iran had been working on building nuclear warheads. Tehran flatly denied the allegations. Iran is the second-biggest producer in the member-list of Organization of Petroleum Exporting Countries after Saudi Arabia. An acceleration of its nuclear programme could disrupt oil supplies.

"We think that the markets are just getting a little concerned over the supply side shock that could come if the matter escalated in some form or extent," analyst David Lennox told AAP.

Investors are also closely monitoring Rome a day after economist Mario Monti replaced Silvio Berlusconi to become Italy's prime minister. Mr Monti has committed to fast track work on Italy's debt crisis. Italy is the eurozone's third-biggest economy.

Gold also fell on Monday, pushed by a strengthening U.S dollar.

Spot gold dropped 0.4 per cent to $1,780.59 an ounce by 12.33pm EDT (0433 Tuesday AEDT), while euro-price gold hiked for a second day, topping above 1,300 ($A1,743.56) an ounce.

U.S. gold futures for December delivery slumped $6.10 to $1,782 an ounce.

Gold's inverse relationship with the U.S. dollar has risen to a negative 0.5, its tightest in more than six months, as investor anxiety turned to the greenback and U.S. Treasury bonds for fiscal safety and security over gold.

"The same reason that is driving the dollar's strength should also be driving gold's strength," said Carlos Perez-Santalla, precious metals broker of PVM Futures.

"In time, when the cracks in the European facade start to show, gold will climb," he added.

Following a Wall Street rally, gold ascended 1.5 per cent on Friday. Last week, the yellow metal scored its third consecutive weekly gain, its longest winning streak since August.

Silver likewise dropped 1.3 per cent to $34.15 an ounce, while other precious metals platinum and palladium posted gains.

Platinum grew 0.1 per cent to $1,635.99 an ounce, while palladium hiked 0.6 per cent to $659.13 an ounce.

As oil and gold posted declines, base metal copper registered a reverse, as prices pushed upward for a second straight Monday.

Three-month copper in the London Metal Exchange (LME) soared $121 or 1.6 per cent to end at $7,760 a tonne.

In New York, the key December COMEX contract climbed 2.45 cents to settle at $3.4880 per pound.

An upbeat tone in Asian markets, spurred by positive demand signals from China's auto sector, led copper prices to rise.

China earlier announced it is serious to push ahead efforts to encourage the development of electric vehicles, boosting Asian equities and Shanghai copper prices. An electric vehicle, according to the Copper Development Association, will use on average as much copper as a similar vehicle with an internal combustion engine.

China, accounting for about 40 per cent of global copper demand, has reached the zenith of purchase buying of stocks of the metal.

Latest LME data showed copper stocks in its global warehouses dropped by 2,300 tonnes to 405,400 tonnes, its lowest since mid-February and down more than 70,000 tonnes from mid-summer highs.