Gold rose on Tuesday as a retreat in the dollar helped bullion recover slightly from the last session's 3-1/2 month lows, but sentiment remained negative as further U.S. interest rate hikes loom.
Spot gold rose 0.5% to $1,832.30 per ounce by 1218 GMT, but traded in a relatively narrow range of about $16. U.S. gold futures gained 0.9% to $1,830.10.
"Gold is behaving less like an arrow and more like a feather. It's drifting a little this way, and a little that way on the winds that drive markets," independent analyst Ross Norman said.
The dollar is off this morning and the U.S. Treasury yields below 3% have given a bit of an uplift to gold, Norman said, adding "it's an encouraging move but doesn't confirm a shift in sentiment."
Gold prices dipped to as low as $1,786.60 an ounce on Monday pressured by gains in the dollar. Reflecting investor sentiment, holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust , were at their lowest level since early March. Expectations of faster U.S. rate hikes tend to discourage investing in gold, which does not bear any interest.
"Only a sudden U.S. dollar sell-off is likely to change the bearish technical outlook," OANDA senior analyst Jeffrey Halley said in a note, adding gold faced resistance just above $1,830 followed by the 200-day moving average at $1,836.50, and then $1,850.00 an ounce.
In other metals, spot silver rose 0.2% to $21.65 per ounce, moving further away from its weakest level since July 2020 hit on Friday.
"Silver is likely also to remain under a cloud," StoneX analyst Rhona O'Connell said in a note, adding that silver can be vulnerable to very sharp moves, especially when there is a short-covering rally involved. Platinum advanced 1.4% to $959.47 and palladium edged up 0.1% to $2,028.98.
(Reporting by Swati Verma and Roshan Abraham in Bengaluru; additional reporting by Arpan Varghese; editing by David Evans and Jason Neely)