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Gold prices rose on Tuesday on investor concern over the economic fallout of aggressive policy tightening by major central banks, although gains were limited as elevated U.S. Treasury yields supported the dollar.

Spot gold rose 0.2% to $1,844.40 per ounce by 1309 GMT, bouncing off a one-week trough of $1,836.10 touched earlier in the session.

U.S. gold futures were up 0.2% at $1,847.20.

"Stubbornly-elevated inflation is threatening to further erode consumption while raising the spectre of a monetary policy mistake, with such risks supporting demand for safe havens," said Han Tan, chief market analyst at Exinity.

World shares fell as a surprise 50-basis-point rate increase in Australia raised concern over policy tightening. [MKTS/GLOB]

Although gold is considered a hedge against inflation, higher interest rates to tame rising prices dim the appeal of bullion, which pays no interest.

The European Central Bank will meet later this week while the Federal Open Market Committee meets on June 14-15.

"The question now is will the ECB also discuss a stronger hike of 50 basis points... in the case of the Fed, are they also discussing a 75 basis point (rise)," said analyst Peter Fertig at Quantitative Commodity Research.

On Friday, data is expected to show a rise in May U.S. consumer prices and that could fuel expectations that the Federal Reserve may continue with aggressive policy tightening beyond July.

Should the incoming CPI print show signs that inflation has peaked that could take some of the edge off the Fed's ultra-hawkish stance and encourage bullion bulls to push gold closer to $1,890, Exinity's Tan added.

The U.S. benchmark 10-year Treasury yield stayed above the key 3% threshold supporting the dollar.

Elsewhere, platinum fell 1.3% to $1,003.97 per ounce and palladium fell 2.1% to $1,961.12. Silver fell 0.7% to $21.91.