Gold dropped 2.4 percent on Tuesday from the record $1,917.90 it achieved the day before as investors moved out of safe-haven assets like precious metals and U.S. Treasuries into stocks and other riskier assets.

Gold for December delivery on the CME Comex division of the New York Mercantile Exchange, fell to $1,874.30 an ounce, while silver fell 2.9 percent from the previous day's high to $42.99 from $44.275, and platinum retreated 1.5 percent to $1,889.50.

The price declines pulled down the value of companies that mine precious metals. Shortly after the opening bell, Barrick Gold Corp. fell 1.9 percent, Gold Fields Ltd. dropped 4.6 percent and AngloGold Ashanti Ltd. was off 2.5 percent.

Silver miners were also lower, with Silver Wheaton Corp. down 1.3 percent,  and Pan American Silver Corp. off nearly 1 percent.

Demand for gold was tamped down by encouraging manufacturing news from Germany and China. Meanwhile, the Shanghai Gold Exchange raised its margin requirements for gold trading to cool the metal's recent gains.

The selling that is coming in feels much better quality than the buying that was taking it up. It is a bit frothy around these sorts of levels, Simon Weeks, head of precious metals at the Bank of Nova Scotia in London, told Reuters.

We have the same old problems and I think gold still has a role to play as a currency in its own right, he said. But in the same way that the world became over-reliant on the U.S. dollar as a reserve currency, I think we should exercise a bit of caution in becoming over-reliant on gold.

It has a role to play and will do for a long time to come, but whether that is at $2,000 or not remains to be seen. I don't think it needs to be as high as it is at the moment.