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 Gold prices pared gains on Tuesday under pressure from concerns about rapid interest rate hikes to tame inflation and an overall stronger U.S. dollar.

Spot gold was up 0.2% at $1,713.59 per ounce as of 1220 GMT. Prices hit a one-week high, rising nearly 1%, earlier in the session.

U.S. gold futures were little changed at $1,724.10.

"Ultimately, spot gold is set to remain beholden to shifting expectations surrounding the Fed's ongoing battle against inflation," said Han Tan, chief market analyst at Exinity.

Focus this week will be on the European Central Bank meeting on Thursday, where it is expected to deliver a 75 basis-point interest rate hike to tame surging prices.

Traders also expect a big interest rate hike from the U.S. Federal Reserve at its Sept. 20-21 policy meeting.

The dollar resumed its rally, hovering near its recent peak. A stronger dollar makes gold expensive for overseas buyers. [USD/]

"Although dollar's slight pullback has eased some of the immediate downward pressures on gold, gold’s upside remains significantly capped by the resilient U.S. dollar," Tan added.

Gold is regarded as a safe-haven investment amid economic uncertainties. But investors opt for other assets in a high-interest rate environment as gold yields no interest.

"What could come to its (gold's) rescue is weaker macro data (the August jobs number helped) and lower inflation readings... But until that happens, rallies remain vulnerable," Edward Meir, an analyst with ED&F Man Capital Markets, wrote in a note.

Meanwhile, India's gold imports in August halved from a year ago, a government source told Reuters.

Elsewhere, spot silver rose 1% to $18.34 per ounce, platinum was 0.2% higher at $847.29, while palladium fell 1% to $2,012.50.

(Reporting by Ashitha Shivaprasad and Brijesh Patel in Bengaluru; editing by Krishna Chandra Eluri, Jason Neely and Louise Heavens)