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By Eric Onstad
Spot gold was down 0.7 percent at $1,311.67 an ounce at 1345 GMT. Last week, prices touched their strongest since Sept. 15 at $1,325.86.
S. gold futures fell 0.6 percent to $1,312.50 an ounce.
The dollar hit a more than one-week high against a basket of other major currencies on Monday. It was up 0.2 percent on Tuesday, making commodities priced in the greenback more expensive for buyers using other currencies.
The euro is down due to concerns about upcoming Italian elections, problems forming a government in Germany and lingering concerns about Brexit, he added.
"There's also the continuing rally in the equity markets. All of that has probably helped take the wind out of gold's sails," Butler said.
Over the next few days, gold may extend losses to around $1,300 and the 100-day moving average around $1,290, he added.
Other analysts expect gold to bounce back.
"A clear move above $1,356 will mean confirmation of the formation and this will lead to next leg of up move towards $1,433/1,485 first," she said in a note.
Among other precious metals, spot silver fell 0.9 percent to $16.98 an ounce.
Platinum dropped 0.9 percent to $963.24 an ounce, after hitting a 3-1/2 month peak on Monday at $973.60.
Palladium was up 0.3 percent at $1,103.55 an ounce after touching a record high of $1,111.40.
"Now that we're above $1,100, there's the potential for profit taking - some of the longs are getting rather extended on Comex," Butler said.
"But the speculative froth aside, we're still in a very strong fundamental market and those fundamentals should keep prices pretty well supported over the next few months."