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Gold prices firmed above recent lows on Tuesday, with the non-yielding asset holding ground despite U.S. Treasury yields powering to nearly 16-year highs as investors look ahead to central bankers' meeting this week for clues on interest rates.

Spot gold held its ground at $1,894.89 per ounce by 0253 GMT, hovering above a five-month low of $1,883.70 hit last week. U.S. gold futures were flat at $1,923.50.

Following a week of back-to-back declines, gold on Monday settled 0.3% higher, reporting its best day in more than two weeks.

"Potential buyers have been waiting to see how far gold could fall, and this could be the beginnings of their re-entering the market in force," said Clifford Bennett, chief economist at ACY Securities.

Any correction in the U.S. dollar from recent highs could immediately ignite a strong gold market rally, he said.

The yield on 10-year Treasury notes hit highs last seen in November 2007 as a resilient U.S. economy boosted the view that the Federal Reserve will keep interest rates higher for longer. [US/]

Higher rates increase bond yields and boost the dollar, making non-yielding bullion less attractive.

For an outlook on interest rates, comments from Fed Chair Jerome Powell on Friday will be monitored at a meeting of central bankers at Jackson Hole, Wyoming.

"The chair is likely to highlight that the Fed has done a good job in bringing headline inflation down toward the target range... and this could be enough to take some of the interest rate pressure off the gold market," Bennett said.

Receding fears of a U.S. slowdown and surging bond yields have gradually eroded the appeal of exchange-traded funds (ETF) backed by traditional safe-haven gold this year.

SPDR Gold Trust, the world's largest gold-backed ETF, resumed outflows on Monday. [GOL/ETF]

In other metals, spot silver fell 0.3% to $23.27 per ounce and platinum was steady at $909.41. Palladium was down 0.1% to $1,243.91.