Gold firmed on Tuesday as a retreat in the dollar index helped the metal snap a four-day losing streak, but bullion remained close to 3-week lows as uncertainty over a looming U.S interest rate hike persisted.
was up 0.2 percent at $1,121.10 an ounce, while U.S. gold futures for December delivery settled down 40 cents at $1,121 an ounce.
Spot prices hit their lowest since mid-August on Monday, at $1,116.20 an ounce, after Friday's hotly anticipated U.S. payrolls data failed to provide clarity on the timing of the Federal Reserve's first interest rate rise in nearly a decade.
Expectations for rising rates, which would lift the opportunity cost of holding non-yielding bullion while boosting the dollar, have pushed the metal 5 percent lower this year and remain gold's biggest driver, analysts said.
Trade is expected to be rangebound ahead of the Fed's next policy meeting on Sept. 16-17.
"Last week everyone was waiting for the non-farm payrolls data, and this week everyone's waiting for the FOMC (meeting) on the 17th," said MKS' head of trading Afshin Nabavi.
"Investors need some kind of assurance on direction before getting into the market."
Stock markets worldwide rallied on hopes of more stimulus measures in China and on strong German trade data, while copper and silver rallied after Glencore announced plans to shut down its loss-making copper mines.
The U.S. dollar fell as much as 0.5 percent.
"It's just optimism in all the markets as a result of China taking some action in the markets," said Phillip Streible, senior commodities broker for RJO Futures in Chicago, referring to the session's strength in gold.
"I don't think gold bulls or bears know what to do at this point, $1,120 is kind of a comfort zone."
Gold has failed to attract strong investor interest as a safe haven despite the recent weakness in stocks due to worries over the Chinese economy, showing that the metal is struggling to find direction outside U.S. monetary policy.
The platinum market deficit shrank in the second quarter, data from the World Platinum Investment Council showed, as rising mine supply and autocatalyst and jewellery recycling outstripped a much smaller increase in demand.