Gold prices traded in a narrow range on Tuesday as investors sought more clarity around the U.S. Federal Reserve's policy outlook, but lower Treasury yields kept a floor under non-yielding bullion.

Spot gold gained 0.1% to $1,963.40 per ounce by 1147 GMT. U.S. gold futures rose 0.3% to $1,980.60.

Gold was stabilising in light of the jobs report on Friday and with an eye on the Fed policy-setting meeting next week, said Craig Erlam, senior market analyst at OANDA, adding that there was still uncertainty on the rate-hike path as the ISM data showed weakness across the board.

"Ultimately it all hangs on the CPI data on Tuesday (June 13)...a strong inflation report kills any hope of a pause, and something in line would give us that confidence to pause next month," Erlam highlighted.

Traders now see a 75% chance that the Fed will hold interest rates at its June 13-14 policy meeting, according to CME Group's FedWatch tool, a change from the 10 straight rate increases.

Benchmark 10-year Treasury yields slipped, improving the opportunity cost of holding gold which yields no interest.

The dollar index edged up 0.1%, close to the two-month high from May 31.

"On the resistance side, bulls seem unable to penetrate above the $1,980-$1,985 zone," DailyFX analyst Warren Venketas wrote in a note.

"Considering there is no further high impact U.S. data for the week, I do not expect much in terms of gold price movement."

On the other side of the Atlantic, hawkish comments from European Central Bank President Christine Lagarde and Bundesbank President Joachim Nagel on Monday cemented expectations for further rate hikes in June.

In other metals, spot silver rose 0.6% to $23.73 per ounce, platinum were up 0.6% to $1,036.54 while palladium gained 0.9% to $1,426.31.

(Reporting by Seher Dareen in Bengaluru; Editing by Sharon Singleton and Chizu Nomiyama)