Gold futures closed down on Monday after oil prices reclined from earlier records levels while the U.S. dollar gained against the euro, eroding the appeal of the precious metal as an alternative investment.

Gold futures for August delivery fell $3, or 0.3 percent, to $928.30 an ounce on the Comex division of the New York Mercantile Exchange. The precious metal rose as much as 0.7 percent as record oil prices boosted demand for the precious metal as a hedge against inflation.

Crude futures traded as low as $139.17 a barrel after gaining as much as 2.5 percent to a record $143.67.

The dollar index, which tracks the performance of the U.S. currency against a basket of other major currencies, was last at 72.43, up from 72.306 late Friday.

Market sentiment has turned more positive after the Fed decision last week, and given the wider euro/U.S. rate differential, the dollar will remain in a more bearish mood, said James Moore, an analyst at, in a research note.

Also on the Nymex Monday, September silver dropped 20 cents to close at $17.51 an ounce. July platinum dropped $10.40 to $2,069.50 an ounce. September palladium fell $6.45 to end at $464.75 an ounce . September copper closed nearly flat at $3.8825 a pound.