"The market is really dollar-driven at the moment," said Afshin Nabavi, MKS's head of trading. "(But) I don't think the fall in gold is over. We're not seeing any kind of real interest on the physical front, so for me it points to an eventual breach of $1,150."
"For the moment, everyone's cautious. We're still stuck in a range, but it's getting lower and lower -- it's probably at $1,150-$1,185 for the time being. We just have to see what news comes out of the United States."
Gold fell to $1,162.35 on Friday, its lowest since March 19, after upbeat U.S. payrolls data bolstered expectations that the Federal Reserve would lift rates for the first time in nearly a decade in September.
That would lift the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced.
Intensifying speculation that the Fed could raise rates sooner than many expect put pressure on stocks in Europe and Asia on Tuesday, though this failed to give the dollar a significant boost.
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Commodities were generally stronger, with benchmark Brent crude oil futures up 2.3 percent and copper prices higher.
Investor positioning continued to reflect bearish sentiment. Holdings of SPDR Gold Trust, the world's top gold-backed exchange-traded fund, are at their lowest since mid-January, undermining any gains in the metal.
In the physical markets, there were signs of bargain-hunting by Chinese consumers after Friday's drop in prices. Premiums on the Shanghai Gold Exchange were about $2.50 an ounce to the global benchmark, up slightly from $1.50 to $2 last week.
Expectations of a further drop in prices and better returns from surging equities in China have tamed demand for gold in Asia despite recent price declines.
Among other precious metals, silver was up 1.1 percent at $16.08 an ounce, while platinum rose 0.9 percent to $1,108.74 and palladium gained 0.9 percent to $748.30.