Gold fell nearly one percent on Tuesday to trade near last week's three-month low, with a firmer dollar and a decline in oil putting pressure on the metal.

Bullion fell as low as $647 an ounce and was quoted at $647.55/648.05 by 1409 GMT, compared with $653.40/$654.90 in New York late on Monday and Friday's low of $644.40.

Technicals are going to be quite important for this week. We are looking for closes above $660, otherwise there is potential for wide downside corrections, said Suki Cooper, precious metals analyst at Barclays Capital.

The dollar will be quite important, especially with the CPI figures being released later on the week. So this week, it would be quite choppy, she said, adding gold needed to consolidate before pushing up.

The dollar rose towards last week's two-month highs versus the euro and hit 3-1/2-month peaks against the low-yielding Swiss franc, bolstered by strong U.S. government bond yields.

Gold often moves in the opposite direction to the dollar and is generally seen as a hedge against oil-led inflation.

Oil slid below $69 a barrel as concerns about inflation and higher borrowing costs dominated financial markets and energy investors focused on increasing shipments of North Sea crude and improving U.S. gasoline stocks.

Traders said current prices were good levels for physical buyers to enter the market, but they might wait until a clearer price trend emerges.

Oil is a little bit down and that's also triggering selling, reducing some inflation concerns, said James Moore, precious metals analyst at

Prices may test lower in the next few days and I wouldn't be surprised if we dip below $640 in the coming sessions, he said, but added that below $650 was a good buying area for physical buyers.

In industry news, Tawhid Abdullah, managing director of the Dubai Gold and Jewellery Group, said booming demand from Middle East buyers boosted Dubai gold sales value by 38 percent in May from the same month last year.

In other metals, platinum fell to $1,288/1,292 from New York levels of $1,292/1,296 an ounce, while silver was at $13.00/13.04 an ounce, down from $13.21/13.25.

Spot palladium was at $366/370 an ounce, versus $366.50/370.50 in the U.S. market.