"Weak economic data in the eurozone and China led to concerns that the U.S. economy will not be immune against a slowdown in economic growth, causing a turmoil in wider markets over the past few days."
The dollar was unchanged versus a basket of leading currencies, undermined by a dip in U.S. government bond yields.
The U.S. currency has lost ground in recent weeks as concerns about slowing global growth prompted investors to trim bets that the U.S. Federal Reserve will raise interest rates soon after an expected end in its stimulus later this month.
A delay in raising rates would be seen as positive for gold, a non-interest-bearing asset, and negative for the dollar.
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In wider markets, European shares rose on Tuesday, trimming the previous day's losses.
"Despite the recent rebound in equities, there are still some worries out there that could attract bids for gold. Weakness in the dollar is a major factor for gold," said a trader in Hong Kong.
With the Chinese data now out, the market's focus will now turn to Wednesday's U.S. inflation figures and Thursday's European manufacturing reports, traders said.
Gold was also bolstered by buying interest in the physical markets from Asia - the top consuming region.
India, the second-biggest gold buyer, celebrates the festivals of Dhanteras on Tuesday and Diwali later in the week. Both are considered auspicious for buying gold, and retail sales and imports could get a boost.
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News that India's central bank will not tighten gold import rules further could also lend some support.
But overall sentiment towards gold remained wary. Holdings in the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 1.18 percent to 751.97 tonnes on Monday - the biggest daily percentage drop in a year.
Among the other precious metals, spot silver was up 0.4 percent at $17.44 an ounce. Platinum was up 0.8 percent at $1,266.70 an ounce, while palladium rose 0.3 percent to $762.40 an ounce.