Gold prices traded in a tight range on Tuesday, as the U.S. dollar recouped some of its overnight losses, making greenback-priced bullion more expensive for overseas buyers.

Spot gold was flat at $1,854.59 per ounce, as of 0557 GMT, after rising to its highest since May 9 of $1,865.29 on Monday. U.S. gold futures gained 0.3% to $1,8538.10. Despite the respite on Tuesday, the safe-haven dollar has been falling broadly alongside a decline in Treasury yields from multi-year peaks, with aggressive easing by the Federal Reserve already priced in.

"The weaker dollar has helped gold break back above its 200-day average ... and we're not yet convinced the greenback has seen a low," City Index senior market analyst Matt Simpson said. Kansas City Federal Reserve Bank President Esther George said she expects the U.S. central bank to lift its target interest rate to about 2% by August, with further action dependent on how both supply and demand are affecting inflation.

Non-yielding bullion, seen as a safe store of value during times of economic crises, tends to become less attractive to investors when U.S. interest rates are raised. "Gold continues to look oversold to my eyes and the daily close (on Monday) above the 200-day average is constructive for bulls," Simpson said.

SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, said its holdings rose 0.44% to 1,068.07 tonnes on Monday from 1,063.43 tonnes on Friday. Spot silver dipped 0.3% to $21.71 per ounce, and platinum eased 0.2% to $956.67, while palladium rose 0.4% to $2,001.10.

Russia's Nornickel on Monday cut its estimate for the global palladium market deficit in 2022 due to lower demand from the car industry amid the Ukraine crisis and a slow recovery of the chip market from shortage.

(Reporting by Bharat Govind Gautam in Bengaluru; Editing by Sherry Jacob-Phillips and Rashmi Aich)