On Monday, spot gold price touched its lowest since February 17 slipping below the psychological $1,200-mark (£818.16) briefly to trade at $1,199.60 (£819.01) an ounce.
Gold edged higher on Tuesday after falling to a 3-1/2 month low in the prior session but the yellow metal remained on track for its biggest monthly decline since November on the back of broad strength in the dollar.
Bullion got some support earlier in the session as Asian stocks wobbled and were headed for a monthly loss.
Spot gold was up 0.5 per cent to $1,211.54 (£827.70) per ounce by 8.22am UAE time.
In Dubai, retail gold prices remained largely flat, with a gram of 18K gold being retailed for Dh112 (£20.83) while 24K gold is being retailed at over Dh146 (£27.15) per gram.
Mark To, head of research at Hong Kong’s Wing Fung Financial Group, said: “There is pessimism for gold prices at the moment. The pressure is not done yet… For the coming two days, I still think the bearish sentiment will dominate”.
The safe haven asset has been under pressure over the past couple of weeks as senior US central bank officials, including Fed chief Janet Yellen, indicated that a rate rise may be on the cards sooner rather than later.
St. Louis Fed President James Bullard said on Monday global markets appear to be “well-prepared” for a summer interest rate hike from the Fed, without specifying a date for the policy move.
Marking its biggest fall since December, Bullion has fallen about 6.25 per cent so far in May.
A bearish target at $1,175 (£801.80) per ounce has been aborted for spot gold, as it managed to hover above a support at $1,206 (£822.96), Reuters technical analyst Wang Tao said.
“The precious complex continues to be under pressure albeit with some positive technical support now flowing through,” said MKS Group trader James Gardiner.
The dollar hovered near its highest in two months against a basket of currencies on Tuesday on growing expectations of an imminent US rate hike.
US non-farm payrolls data for May is due on Friday and a solid reading could heighten expectations for a June rate rise.
Investors will also be looking out for trading cues from data on US personal income and consumer confidence, due later in the day.
This article is for information purposes only.
Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.
There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.