Gold prices slipped on Tuesday as the U.S. dollar strengthened along with Treasury yields, while markets awaited comments on economic health from Federal Reserve Chair Jerome Powell and Treasury Secretary Janet Yellen later in the day.

Safe-haven gold is highly sensitive to rising bond yields as they raise the opportunity cost of holding the bullion.

Spot gold was down 0.3% at $1,734.31 per ounce by 0345 GMT. U.S. gold futures were also down 0.3% at $1,733.70 per ounce.

"We get a little bit of easing in yields that encourages people to step up and buy some gold. Again the afterthought is we have a little bit of higher yields coming up again, so we better sell gold - this is going to be a constant theme," said Stephen Innes, chief global market strategist at financial services firm Axi.

The dollar index was up 0.1% against a basket of currencies, supported by firm U.S. Treasury yields.  

The U.S. economy is "much improved," Powell said on Monday, but at the same time warned that the recovery is still "far from complete." 

"We expect gold to either see selling pressure once more beyond the quarter end, but may trade in a range in the next one week," OCBC analysts said in a note.

Palladium was down 0.3% at $2,608.95, trading close to a more than one-year high of $2,755.18 on March 18.

"Palladium provides a good reflation alternate because the market is in such a massive deficit and they're projected to be in a deficit in 2021 and the need is high," Innes added.

"You've got a deficit because of the mine closures, but it is going to take a lot longer to repair ... now it's a couple of months, which is going to continue to weigh on the massive deficits we think is building."

Silver slipped 1% to $25.53 and platinum fell 0.9% to $1,172.91.

(Reporting by Asha Sistla in Bengaluru, Editing by Sherry Jacob-Phillips) ((Asha.Sistla@thomsonreuters.com; If within U.S. +1 646 223 8780; outside U.S. +91 80 6182 2808; Reuters Messaging: Reuters Messaging: asha.sistla.thomsonreuters.com@reuters.net))