From the Minelab site:
"Persons new to the hobby of metal detecting will probably realize fairly quickly that it isn't just the ground that can cause false signals. There are other things lurking in the goldfields that can be just as noisy; namely the dreaded hot rocks!
A hot rock can loosely be defined as: any rock or stone not containing a valuable mineral (gold, silver, or copper) which generates an audible signal response on a metal detector. The exact cause of this phenomenon has been debated among detectorists for some time. Numerous theories have been proposed, however those that seem most reasonable to me are the ones that focus on the iron-bearing minerals found within most hot rocks. These minerals are predominately the iron oxides: magnetite, hematite, limonite, maghemite and lepidocrocite. All of these oxides exhibit a varying degree of ferromagnetism and can be magnetized by being exposed to another magnetic field; like the one generated by a detector's search coil. If the coil is swept across a high iron content hot rock, a secondary magnetic field will be created around it. This secondary field will then be sensed by the coil's primary field and trigger an audible response via the headphones or speaker."