Gold prices fell more than 1 percent in Europe on Tuesday, pushing through support at $1,690 an ounce, as jitters over  euro zone growth pressured the euro versus the dollar.

Platinum, palladium and silver were all caught up in the selling, falling more than 2 percent in gold's wake.

Spot gold was down 1.1 percent at $1,687.86 an ounce at 1141 GMT, while US gold futures for April delivery were down $15.20 an ounce at $1,688.70.

The metal slipped to session lows as the dollar rose to a 2-1/2 week high against the euro, with the single currency pressured by concerns about a Greek debt swap deal. Traders cited steady selling by macro funds.

Stock markets fell and the cost of insuring Greek, Spanish and Italian government debt against default rose on uncertainty over Greece's debt restructuring and a worsening economic outlook, while safe-haven German Bunds rose. 

Gold has recently failed to benefit from the safe-haven flows that helped push it to record highs last year as investors seek the safety of the dollar instead.

"Gold this year has been driven by exchange-rate mechanisms.
Any dollar strength has not been positive for gold," said Citigroup analyst David Wilson.

"At some point, if confidence over Europe evaporates, you would think that should be postive for gold, but you still have to keep an eye on the dollar-gold trade-off."     

The precious metal is extending losses after falling nearly 4 percent last week, the most since mid-December, after Federal Reserve chair Ben Bernanke disappointed financial markets when he failed to signal another imminent round of monetary easing.

If gold fails to push back above support at $1,690 an ounce, it is likely to decline towards the $1,649-$1,656 area, technical analysts said.

"In the near term... we sense that the market might need a period of consolidation and possibly another decline before it can trade significantly higher," said HSBC in a note.

Data showed gold imports into China from Hong Kong dipped 15 percent in January from the previous month, reflecting slower sales during the Lunar New Year holiday. Hong Kong's gold exports to China in 2011 tripled from a year earlier, showing China's strong appetite for bullion investment.

Physical demand from number one gold consumer India firmed as prices dropped and as the rupee weakened, making dollar-priced gold cheaper for local buyers.

Silver also sold off in gold's wake, down 2 percent at $33.30 an ounce. The gold/silver ratio, or the number of silver ounces needed to buy an ounce of gold, rose back to 50.7 on Tuesday, after dropping to a five-month low at 48.4 last week, as silver underperformed gold in a falling market. - Reuters