Gold slipped from a three-month peak on Tuesday, pressured by earlier strength in the dollar as the euro fell on weak German industry data and nervousness ahead of the French elections. Spot gold was down 0.2 percent at $1,233.40 an ounce by 3:18 pm EST (2018 GMT), after rising to $1,235.78, its highest since Nov. 11.
US gold futures settled up 0.3 percent at $1,236.10. While controversy over US President Donald Trump's temporary travel ban on people from seven Muslim-majority countries has recently boosted the dollar and gold as safe-haven assets, focus shifted to Europe on Tuesday.
"For all of the issues that are raised by Trump, we have to remember it's a two-sided story for the dollar and what's happening in Europe is just as important," said Tom Kendall, head of precious metals strategy at ICBC Standard Bank. "Today the figures were very disappointing in German manufacturing."
Weaker output in manufacturing and construction drove the biggest monthly drop in German industrial production in nearly eight years in December. Among other precious metals, silver fell 0.2 percent to $17.70 an ounce after rising to $17.79, its strongest since Nov. 11.
Platinum shed 0.7 percent at $1,004.65, after hitting its highest since Nov. 9 at $1,015.20. "Falling projections of diesel's share of the European auto market could reduce our forecast of European autocatalyst demand by 163 thousand ounces (koz) in 2020, keeping the platinum market in surplus for the foreseeable future, ceteris paribus," said Standard Chartered in a note.
Palladium dropped 1.5 percent at $760.75.