Gold rose to its highest in more than a week on Tuesday, supported by an easing dollar and lower U.S. Treasury yields, though firmer appetite for riskier assets kept bullion's advance in check.
Spot gold rose 0.2% to $1,732.53 an ounce by 1059 GMT after hitting its highest since March 25 at $1,738.32. U.S. gold futures gained 0.2% to $1,732.70.
"A softer dollar is the main reason for the bid coming into gold ... and also the yields, which during the past week have not done a great deal," said Saxo Bank analyst Ole Hansen.
Making gold affordable for other currency holders, the dollar fell 0.3% against a basket of rivals, while benchmark U.S. Treasury yields were lower.
However, risk sentiment in wider financial markets remained upbeat, with global equities at record highs on strong economic data from China and the United States, reducing demand for safe-havens assets such as gold.
"For the gold story to return to a firmer footing ... we need to see either some geopolitical concerns or inflation pick up more aggressively than the market has been pricing," Hansen said.
Investors are also awaiting minutes on Wednesday from the U.S. Federal Reserve's last meeting for further clues on monetary policy outlook.
Cleveland Fed Bank President Loretta Mester on Monday said that the U.S. economic outlook is brightening, though the Fed should stick to its easy policy to support growth further.
"The environment is not very robust for gold. The constant rise in yields and a stable dollar on the back of continued strong data from the United States have sort of sparked a feeling of central banks becoming hawkish much before the expected time," said IG Market analyst Kyle Rodda.
In other precious metals, silver rose 0.3% to $24.98 an ounce, palladium added 0.2% to $2,670.17 and platinum fell 0.6% to $1,201.85.