Gold prices tumbled Tuesday to their lowest levels in three months as European financial concerns dissipated.

The drop in gold was exacerbated by automatic sell orders investors often put in place to minimize losses, said James Steel, an analyst with HSBC in New York. The sell-off picked up once prices hit $1,185 an ounce and triggered the sales, Steel said. Volume was also light, which can exaggerate moves.

Gold dropped $25.20, or 2.1 percent, to settle at $1,161.80 an ounce. That's the lowest settlement price for the contract since April 26 when it settled at $1,154.00 an ounce.

Two big European banks, UBS and Deutsche Bank, both reported strong quarterly profits Tuesday. The earnings came a few days after regulators said nearly all banks in Europe could withstand a weakening economy and mounting government debt problems across the continent.

Gold prices had been rising steadily since late April as investors worried about Europe's economy and financial sector sold euros and opted for safer alternatives.

"There's been a lot of selling with the recovery in the euro," Steel said. Investors "don't have a new compelling reason to buy."

During the past three months, the euro fell from $1.3394 on April 26 to a four-year low of $1.1916 in early June before recovering in recent weeks. It hovered back near $1.30 throughout Tuesday.

Other metals followed gold lower throughout the day. Silver for September delivery dropped 57.4 cents, or 3.2 percent, to $17.626 an ounce. September copper dropped 1.65 cents to settle at $3.2065 a pound.

Energy prices fell after some disappointing reports on consumer confidence and manufacturing tempered expectations for future demand. Weak economic readings often drag down oil prices because any signs of slowdown in the economy often leads to a drop consumption of energy.

The Conference Board's consumer confidence index fell more than expected this month and the Richmond Federal Reserve's regional manufacturing report also slowed.

Benchmark crude for September delivery fell $1.48 to $77.50 a barrel on the New York Mercantile Exchange.

In other energy trading, heating oil fell 4.17 cents, or 2 percent, to $2.0294 a gallon, while gasoline dropped 4.23 cents, or 2 percent, to $2.0641 a gallon. Natural gas rose 6.3 cents to $4.646 per 1,000 cubic feet.

Grain and bean prices were mixed. Wheat for September deliver rose 5.5 cents to settle at $5.95 a bushel, while corn for December delivery fell 1 cent to $3.77 a bushel. November soybeans fell half a penny to $9.655 a bushel.