South Korea contends North Korea fired artillery shells south of the border, near the western line the countries share. South Korea's military is on high alert.
"Political risk is typically a positive for gold, but losses in commodities this morning are weighing on precious metals generally," according to a report by Edel Tully, an analyst at UBS AG in London.
Gold for immediately delivery rose 0.8 percent Tuesday. Silver for immediate delivery in London decreased 2.7 percent to $27.1038 per troy ounce. Palladium also slipped 4.7 percent to $661.75. Platinum fell 1.2 percent to $1,641.50. The dollar gained value when held up against the euro following speculation about tumult in Ireland regarding its troubled banks and the nation's elections set for early next year.
The analyst said Thanksgiving in the U.S. also will impact precious metal prices.
"The proximity of year-end and the nagging fear of Chinese tightening, it is likely that investors across asset classes will be tempted to accelerate their profit-taking," according to Tully's report.
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