Gold slipped on Tuesday after hitting a lifetime high at $1,300 an ounce in the previous session as a rebound in the US dollar prompted speculators to lock-in gains.

Although lower prices could stir up purchases from jewellers, gold's failure to stay above Monday's peak could spur more selling from investors. Silver was off a 30-year high, while platinum and palladium tracked stock markets lower.

Spot gold fell $3.65 an ounce to $1,292.40 an ounce by 0443 GMT, having struck a record on concerns over the global economic recovery and a weaker dollar. Gold has gained as much as 18.5 per cent this year.

"At the moment, we're seeing some heavy resistance selling at $1,300, and that's creating some downward pressure," said Mark Pervan, senior commodities analyst at ANZ in Melbourne.

"If it breaks through and closes above $1,300, we expect it to get to $1,320 within a week and we'll get there very quickly." A series of economic data from the United States this week will be closely watched for direction on gold prices, Pervan said.

US gold futures for December delivery dropped $5.0 an ounce to $1,293.6 an ounce. The contract high was below the record at $1,301.60 set on Friday.

The dollar got a reprieve on Tuesday, helped by a report the Federal Reserve was weighing a more open-ended, smaller-scale bond buying programme compared with 2009.

The Wall Street Journal reported the Fed would announce purchases of a much smaller amount of bonds for a brief period and leave open the question of whether it would do more, a decision that would turn on how the economy was doing.

"A lot of gains in the last week and a half have been driven by a weak US dollar. There is a reasonable chance to expect the dollar to rebound mildly of a low base," said Pervan of the ANZ. "And that will certainly trigger some selling as well in the gold market."

Silver slipped after rallying to its highest in three decades at $21.61 an ounce on Monday, tracking gains in gold.

Despite the correction in bullion prices, delegates polled at the London Bullion Market Association annual conference see no end to the rally any time soon.

The physical market was calm on Tuesday after seeing demand from top consumer India on the previous day despite record prices.

"Gold looks bullish one day, and then it turns bearish. No wonder all the clients prefer to stay sidelined," said a physical dealer in Singapore.

"I've seen some buying this morning from Chinese and Thai consumers but volume is not great. There's no buying from India yet but I think they may continue to buy later when their market opens."

India is in the middle of the festival season, with Dussera in October and Dhanteras in November, when jewellers register their highest sales every year. Weddings also take place during the festive season.

The Nikkei average slipped on Tuesday after US stocks slipped as investors took a break from a four-week rally. – Reuters