Gold retreated from an earlier four-week high on Tuesday, losing momentum as lacklustre euro zone data hurt the euro versus the dollar, though fears over global growth limited losses.

Deepening worries over the health of the global economy dragged European shares lower on Tuesday, while figures showing a slump in oil demand growth knocked Brent crude futures 3 percent to near four-year lows.

Spot gold was at $1,234.45 an ounce at 1410GMT, down 0.2 per cent, after briefly touching a four-week high of $1,237.90/oz earlier. US gold futures for December delivery were up $4.80 an ounce at $1,234.80.

The euro slid against the dollar after an index of German analyst and investor morale fell below zero for the first time in nearly two years, suggesting Europe's largest economy is reeling from crises abroad and a weak euro zone.

"For zero-yielding assets held as a safe-haven store of value, the strength of the dollar and the yield on other low-risk dollar assets are of huge importance," Nic Brown, head of commodity research at Natixis, said.

"If we get more dollar strength and higher bond yields in 2015, this would continue to exert downward pressure on precious metal prices."

Gold, priced in dollars, becomes more expensive for holders of other currencies when the US unit strengthens. While the dollar was recovering some of the ground lost on Monday, stock markets continued to retreat, underpinning the metal.

"Gold wasn't interesting for many investors because they could invest in stocks, but right now, the fact that the gold price can be a hedge against stock market turmoil is coming back into the minds of investors," Thorsten Proettel, a commodity analyst at LBBW, said.

Modest buying was seen overnight in the world's biggest gold consumer China, precious metals house MKS said in a note. Demand for the metal from Chinese buyers was firm last week after they returned from holiday on Wednesday, helping lift prices from last week's lows.

"Demand from (China) has declined a little in lieu of the higher prices and is apparent from the lower premiums seen on the Shanghai Gold Exchange," MKS said. "Today we traded between $2-3 over spot, when last week was closer to $3-4."

With a sell-off in equities, gold-backed exchange-traded funds (ETFs) attracted significant investors on Monday for the first time in a month after heavy outflows, Reuters data showed.

"(Our) gold exchange-traded products saw their first inflows in a month as dovish Federal Open Market Committee minutes led to dollar weakness, while weak German data renewed interest in the hard defensive assets," said Danny Laidler, head of the ETF Securities' Australia & New Zealand operations.

"Last week's bounce (in gold) could trigger a short-covering rally helping to sustain momentum in the upward trend," he said.

Among other precious metals, silver was down 0.2 percent at $17.40 an ounce, while spot platinum was flat at $1,260.10 an ounce and spot palladium was up 1.5 percent at $790 an ounce.-Reuters