Gold firmed on Tuesday as some traders bet that recent weak U.S. economic data may prompt the Federal Reserve to rethink its rate hike trajectory, while also positioning for further cues from the minutes of the central bank's last meeting.
Spot gold rose 0.4 per cent to $1,929.54 per ounce by 0954 GMT, with trading volume likely thinned by a US holiday.
US gold futures gained 0.4 per cent to $1,937.20.
"Weaker than expected US economic data released on Monday, including PMIs, have supported gold. Market participants will closely track upcoming US job market data, watching if previous US interest rate hikes will slow down the US economy," UBS analyst Giovanni Staunovo said.
But the minutes of the Fed's June meeting on Wednesday could "sound hawkish in line with the recent testimony of Jerome Powell," Staunovo added.
Investors see a nearly 90 per cent chance of a 25-basis-point hike in July, according to CME's Fedwatch tool. High rates discourage investment in zero-yield gold.
Focus this week will also be on non-farm payrolls data, after US manufacturing slumped in June.
"Right now, headwinds for gold are expectations of a further 50 bps tightening, more liquidity withdrawal and rates remaining relatively elevated for some time," said Nicholas Frappell, global head of institutional markets, ABC Refinery.
Also on the radar were fresh developments in the US-China trade war, with Beijing restricting exports of some metals used in semiconductors, electric vehicles and high-tech industries.
Previous flare-ups also benefited the US dollar, reducing demand for gold.
Spot silver rose 0.6 per cent to $23.0094 per ounce, and palladium jumped 1.5 per cent to $1,247.14. Platinum climbed 1.5 per cent to $919.79, set for a third consecutive session of rise if gains hold.
"The white metals remain linked to the performance of gold. That said, economic growth concerns have a bigger impact as those metals (which) have a higher industrial usage than gold," Staunovo said.