Gold steadied on Tuesday after dropping to a nine-month low earlier as investors positioned for U.S. economic data, with a strong dollar and bets for steep interest rate hikes still keeping a leash on non-yielding bullion.
Spot gold was little changed at $1,734.59 per ounce by 0916 GMT after hitting $1,722.36 earlier in the session, its lowest since Sept. 30. U.S. gold futures rose 0.1% to $1,733.60.
The dollar climbed to a 20-year peak against a basket of major rivals, making greenback-priced gold more expensive for buyers holding other currencies.
"Gold is set to stay significantly suppressed over the near-term, as the weight of more incoming super-sized Fed rate hikes hang like a millstone around gold's neck," said Han Tan, chief market analyst at Exinity.
"A higher-than-expected headline CPI print (on Wednesday)should pave the way for yet another 75 basis points hike by the Fed later this month; a scenario widely interpreted to be a negative for gold," Tan added.
However, offering some support for zero-yield gold, benchmark U.S. 10-year Treasury yields dropped for a second consecutive session.
A raft of U.S. economic data - including consumer prices, retail sales and factory output - should provide a glimpse of the extent to which inflation has peaked as the Federal Reserve moves closer to next week's policy meeting.
Meanwhile, the euro sank to within a whisker of parity with the dollar and stock markets fell as the prospect of further central bank tightening and worries about the health of economies worldwide unnerved investors.
"Gold seems to have found a few friends near $1,730 over the last couple of days, without ever seriously looking like it would reverse its recent selloff," OANDA senior analyst Jeffrey Halley said.
Spot silver dropped 1% to $18.90 per ounce, platinum fell 1.7% to $855.04 and palladium slipped 1.4% to $2,132.90.
(Reporting by Arundhati Sarkar and Bharat Govind Gautam in Bengaluru; Editing by Krishna Chandra Eluri)