Gold slipped from a near three-month peak on Tuesday, pressured by a strong dollar as the euro fell on nervousness ahead of the French elections and weak German industry data. Spot gold was down 0.4 percent at $1,230.60 per ounce at 1515 GMT. In the previous session, the metal touched $1,235.73, its highest since November 11.
US gold futures were unchanged at $1,232.10. While controversy over 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. The prospects of further US interest rate hikes was also a concern for gold, said Mark To, head of research at Hong Kong's Wing Fung Financial Group. But gold has recently appreciated as an asset whether in euros, yen, pounds or dollars, said Matt France, head of institutional metals sales in Asia for broker Marex Spectron.
"This is a genuine re-allocation into gold as a safe haven trade not just a reactive trade to US dollar moves," he said in a note. Among other precious metals, silver fell 0.5 percent to $17.65. Earlier in the session, it reached $17.76, its strongest since November 11. Platinum shed 0.8 percent to $1,002.75, after hitting its highest since November 9 at $1,015.20 earlier in the day. Palladium dropped 0.7 percent to $767.
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