Hello there KLG,
I agree this is German for sure and I reckon it would be circ 1870-80 maybe earlier. I think this would be a badge bolted/fixed to the flap of a cartouche as worn by Hussars, Artillery, Uhlans, etc. It appears to be originally flat and that would suggest that this was not worn on a hat or helmet or even on a tunic sleeve. Certainly an other ranks fitting as officers' equivalent were without a doubt more ornate. I have not proof as such but in my opinion this is the most likely use. Another 'non-military' use could be from a pouch as worn by civil services such as post officers or police maybe. However, due to the collection it was in amongst, it is probably as you imply. Military.