Gold fell in London and New York after U.S. Secretary of State Condoleezza Rice said a cease-fire could be reached in the Middle East this week.

Some investors buy bullion as a haven in times of political tension. Gold climbed to an eight-week high of $676.53 an ounce five days after conflict broke out between Israel and Hezbollah on July 12. Bullion has since lost $40 an ounce.

``Buying that is related to conflicts doesn't tend to last that long,'' said David Gornall, head of foreign exchange and bullion at Natexis Commodity Markets Ltd. in London. ``The market is looking for opportunities to sell.''

Gold for immediate delivery in London fell 60 cents, or 0.1 percent, to $634.15 an ounce at 11:31 a.m. in London. Gold futures for delivery in December dropped $2.70, or 0.4 percent, to $645.10 an ounce on the Comex division of the New York Mercantile Exchange.