Spot gold was mostly unchanged at $1,322.82 an ounce, as of 0234 GMT. On Monday, it rose 0.5 percent in its biggest one-day percentage gain in more than a week.
U.S. gold futures were down 0.1 percent at $1,324.6 per ounce.
“We suspect that gold has pretty much decoupled from equities for much of the last week and is instead tracking the dollar’s ups and downs more closely,” said INTL FCStone analyst Edward Meir.
The dollar’s index against a basket of six major currencies extended modest losses suffered overnight and was last down 0.1 percent at 90.126.
On Monday, it fell 0.3 percent in its biggest one-day percentage drop since February 1.
Meanwhile, Asian stocks pulled further away from two-month lows on Tuesday, lifted by Wall Street’s extended rebound from last week’s steep fall.
“Gold held up better than stock markets last week… Relative to stocks, gold looks to be good in value and continued volatility in the equity markets might make gold more attractive
for its lower volatility,” analysts at Heraeus Precious Metals said in a note.
“So far gold investors have been largely unconcerned. While demand for investment bars increased slightly, ETFs posted outflows with total holdings falling.”
Holdings of SPDR Gold Trust, the largest gold-backed exchange-traded-fund (ETF), fell 2.5 percent last week, the worst since the week ended July 30.
Meanwhile, investors waited for the U.S. inflation data for January which is due on Wednesday.
Inflation expectations edged lower last month, dulling a year-end rise, according to a survey published by the Federal Reserve Bank of New York on Monday.
Inflation worries generally boost gold, which is seen as a safe haven against rising prices. But expectations that the Fed will raise interest rates to fight inflation make gold less attractive because it does not pay interest.
In other precious metals, silver gained 0.8 percent to $16.48 per ounce, platinum rose 0.2 percent to $972.50 per ounce and palladium climbed 0.2 percent to $986.80 per ounce. Source: Reuters