Spot gold was up 0.2 per cent at $ 1,306.51 per ounce at 0118 GMT. Gold fell to $ 1,301.51 in the previous session, its lowest level since Dec. 29.
US gold futures for June delivery rose about 0.1 per cent to $ 1,307.60 per ounce.
The dollar index was steady near a four-month high at 92.446, supported by the outlook for a strong US economy and rising yields amid signs of slowdown elsewhere, especially in Europe.
The US Federal Reserve is set to hold interest rates steady this week but will likely further encourage expectations that it will lift borrowing costs in June on the back of rising inflation and low unemployment.
The US economy is expanding at a 4.1 per cent annualized rate in the second quarter as the government said construction spending fell in March and revised up its figure on building activity in February, the Atlanta Federal Reserve’s GDPNow forecast model showed on Tuesday.
SPDR Gold Trust , the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.51 per cent to 866.77 tonnes on Tuesday from 871.20 tonnes on Monday.