Gold firmed on Tuesday, recovering from a near four-week low, as U.S. stock markets retreated, but a strong dollar and robust economic data from the U.S. and China eased fears of a global slowdown, capping bullion's advance.
Spot gold was up 0.2 percent at $1,290.29 per ounce, having touched its lowest level since March 7 at $1,284.76 earlier. U.S. gold futures settled $1.20 higher at $1,295.40.
"Equities have turned negative here ... It's a tug of war between the equities and precious metals markets," said Bob Haberkorn, senior market strategist at RJO Futures. "Gold is going to be stuck in a range-bound movement for the time being unless there is a breakdown in equity markets."
U.S. stocks pulled back after a three-day surge, while investors looked for more signs of strength in the economy in the wake of growth worries, after a surprise rebound in China's manufacturing data and better-than-expected U.S. numbers pushed the S&P 500 to near six-month highs.
"Better economic data shows there is no reason to carry safety at the moment," said Phil Streible, senior commodities strategist at RJO Futures in Chicago. Bullion is seen as a hedge against political and economic uncertainty.
Also, the dollar rose to a three-week high against a basket of currencies, making gold expensive for holders of other currencies. New orders for key U.S.-made capital goods slipped in February and shipments were unchanged, but data for January was revised slightly higher, which could support views that the manufacturing sector was stabilizing.
This comes after U.S. manufacturing activity rebounded a bit more than expected in March, according to an industry report released on Monday.
Meanwhile, International Monetary Fund Managing Director Christine Lagarde said while global growth has lost momentum amid rising trade tensions and tighter financial conditions, pauses in rate hikes will help boost activity in the second half of 2019.
Investors are also keeping a close watch on Sino-U.S. trade negotiations, set to resume later this week in Washington with a Chinese delegation led by Vice Premier Liu He. Holdings in the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, fell 1.5 percent on Monday, their biggest one-day percentage decline in a month.