Gold fell nearly 1 percent on Tuesday, sliding from a two-month peak as investors took stock of US President Donald Trump's first policy moves and the dollar stabilised after plumbing seven-week lows this week.
Trump formally withdrew from the Trans-Pacific Partnership trade deal on Monday and told US manufacturing executives he would impose a hefty border tax on firms that import products after moving American factories overseas.
"It's all been flagged and it's all playing out according to the well-rehearsed script of Trump and his advisers," Robin Bhar, Societe Generale's head of metals research, said.
"The high in gold is an opportunity to take a bit of profit," Bhar said, adding that the price was stuck in a $1,120-$1,220 range.
Trump's protectionist statements and a lack of detail on policy have led some investors to opt for gold, which is often seen as an alternative investment in times of geopolitical and financial turmoil. It rose to its highest level since November 22 during Tuesday's session before giving back gains. Spot gold was down 0.77 percent at $1,208 an ounce after peaking at $1,219.59. US gold futures slipped 0.4 percent to settle at $1,210.8.
The dollar index, which measures the greenback against a basket of currencies, recovered to about 100.330 after falling to a seven-week low of 99.899 in the previous session. Silver lost 0.76 percent to $17.07 per ounce. Palladium was up 1.3 percent at $785.97 an ounce after hitting $796.20, its highest since May 2015. Platinum also rose, hitting the highest since November 10 at $1,004.50.