Gold prices lost nearly one percent on Monday on softer oil prices and weakness in other commodities, analysts said.

"I do feel that the market is still looking for better direction and specifically with respect to gold, it has got two masters it has to follow," David Holmes, director of precious metals sales at Dresdner Kleinwort Investment Bank, said.

"One is the weakening dollar, which is a positive, and the other is the weakening commodities complex, which is a conflicting pressure. I am still curious to know which is going to be the winner," he said.

Gold fell as low as $582.00 an ounce and was quoted at $583.70/584.70 by 1401 GMT, versus $587.80/588.80 in New York late on Friday.

Gold came under pressure as oil dropped below $60 a barrel to a six-month low. U.S. crude has fallen nearly $19 from its mid-July peak of $78.40, its biggest slide in 15 years.

A drop in oil prices lower gold's appeal as a hedge against inflation, while a decline in the dollar makes the metal cheaper for holders of other currencies and often lifts bullion demand.

"Gold has seen a mixed start this morning," said James Moore, analyst at TheBulliondesk.com. "Gold remains very much at the mercy of fluctuations in the dollar and the oil market."

The dollar was tightly traded near recent two-week lows against the euro and yen as investors awaited data this week that might fan expectations for the next Federal Reserve move to be an interest rate cut.

In other markets, base metals prices slipped on growing nervousness about falling demand as global economic growth slows.

The Reuters/Jefferies CRB index fell below 300 to a 14-month low as slipping oil prices brought down commodity prices, according to exchange data.

MARKET OUTLOOK

This week brings U.S. housing data, consumer confidence and the Personal Consumption Expenditure index -- the Fed's favorite measure of inflation. Softer-than-expected readings could reinforce expectations, still slim, that the Fed might cut interest rates as early as December.

Lower interest rates are generally seen positive for gold.

"The fourth-quarter fundamentals for gold are positive ... In addition, Societe Generale economists are looking for renewed weakness in the U.S. dollar, which will help to underpin prices, especially if the U.S. housing market slowdown worsens markedly and leads to a flight to quality," Societe Generale said.

"However, we expect prices to weaken through much of 2007 in the face of a growing consensus that the commodities bubble is deflating," it said in a quarterly report.

In other precious metals, silver fell to $11.07/11.14 an ounce from $11.15/11.22 in the U.S. market, while platinum was at $1,125/1,130, down from $1,142/1,147. palladium declined to $311/316 from $313/319.

In industry news, Russia's Norilsk Nickel , the world's top palladium miner, is selling practically all the precious metals it produces and is taking more orders from Asia as jewelry consumption there grows, Tav Morgan, deputy general director for production, told Reuters.