COMMODITIES-Oil down as Iran tensions ease; gold hits 3-week low

NEW YORK Tue Aug 6, 2013 6:52pm EDT

NEW YORK Aug 6 (Reuters) - Oil prices fell on Tuesday on signs Iran-West tensions may ease enough to remove some of the risk in Middle East crude supplies, while gold hit three-week lows as better data on the U.S. economy led fewer investors to see bullion as an economic hedge.

Soybean futures fell to a more than one-year low, weighed down by favorable crop conditions and weather that points to a bumper harvest.

Arabica, the premium grade for coffee, also closed lower after the government of Brazil, the world's biggest grower, disappointed investor by failing to announce price support measures widely expected by the market.

Copper was one of the few commodities that bucked the broadly lower trend. Futures of the metal closed slightly higher in London on a weaker dollar and ahead of data from China expected to shed light on copper demand from the No. 1 consumer of the commodity.

The 19-commodity Thomson Reuters-Jefferies CRB index settled down for a third session in a row. It lost 0.6 percent after a 0.2 percent decline on Monday and half percent drop on Friday.

Oil fell as Iran's new president signalled willingness to negotiate with the West over Tehran's disputed nuclear program and as U.S. gasoline prices slid after a sell-off in ethanol credits.

U.S. crude oil settled down $1.26 at $105.30 per barrel. Benchmark Brent crude out of Europe's North Sea dropped 52 cents to finish at $108.18.

Gold came under pressure after international trade data showed the U.S. economy likely grew faster than initially reported in the second quarter, thanks to a sharp narrowing in the trade deficit to its lowest in more than 3-1/2 years in June as exports touched a record high and imports fell.

Spot gold fell 1.7 percent to $1,281.29 an ounce by 6:38 p.m. EDT (2238 GMT), having earlier dropped as much as 1.9 percent to its lowest since July 18 at $1,279.24.