- Investors now eye the US Commerce Department's February retail sales data due on Tuesday, following January's 5.3% surge.
Gold prices were subdued on Tuesday as investors watched for a US Federal Reserve meeting to tackle concerns over inflation and bond yields, although appetite for riskier assets grew on hopes of a swifter economic recovery.
Spot gold was flat at $1,731.89 per ounce at 0324 GMT, while US gold futures rose 0.1% to $1,730.40 per ounce.
"The Fed may address rising inflation concerns and even consider to push forward asset purchasing to compensate for the rising yields and that would be very positive for gold prices," said DailyFX strategist Margaret Yang.
"The overall sentiment is bearish, however, given the vaccine optimism and the passage of the stimulus packages," she added.
Fed policymakers, in the upcoming FOMC meeting, are set to forecast that the US economy will accelerate at the quickest rate in decades in 2021, with unemployment dropping and inflation increasing, as the COVID-19 vaccine initiative ramps up and a $1.9 trillion relief package is dispersed among households.
"The strong recovery from the pandemic has been raising concerns that the Fed may lift interest rates earlier than expected. However, Chair Powell and his colleagues have been quite persistent that maximum employment is far away, allowing them to be patient," ANZ analysts wrote in a note.
Easing of the recent selloff on bonds has helped stabilise gold in recent days, ANZ said.
Putting further pressure on the non-yielding metal, Asian stocks were expected to open higher on Tuesday on faster recovery optimism.
Investors now eye the US Commerce Department's February retail sales data due on Tuesday, following January's 5.3% surge.
Data showed gold holdings in the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, fell 0.2% to 1,050.32 tonnes on Monday.
In other metals, silver fell 0.4% to $26.15, platinum was up 0.1% at $1,213.46 and palladium dropped 0.1 % to $2,385.61.