Gold were close to a near one-week low on Tuesday, as a stronger dollar and renewed interest in riskier assets dampened demand.
Spot gold edged 0.1 percent higher to $1,313.02 per ounce by 1058 GMT, having hit its weakest since Jan. 29 at $1,308.20 in the previous session. Prices moved in a range of about $5.
US gold futures were down 0.1 percent at $1,317.70 an ounce.
World stocks extended their robust start to the year, making non-yielding bullion a less attractive investment, while the greenback was on course for a fourth straight day of gains.
"One of the things potentially capping gold's rally here is the fact that the US Federal Reserve's dovishness points to stronger demand for riskier assets," said Marcus Garvey, analyst at ICBC Standard Bank.
"The big question now is how much the Fed's position has changed and can it get more dovish... But given the fact that the US domestic data is reasonably stable, there is still scope for the Fed to hike rates once this year."
Gold rose to its highest since late April at $1,326.30 last week, after the Fed kept interest rates steady and said it would be patient on further hikes amid a cloudy outlook for the US economy due to global growth concerns and the US-China trade dispute.
However, solid US jobs data on Friday allayed concerns of an immediate slowdown in the US economy.
The central bank may need to raise interest rates a bit further if the economy does well, Cleveland Fed President Loretta Mester said on Monday.
Gold tends to fall out of favour when interest rates rise.
Attention has now turned to US President Donald Trump's State of the Union address which could hint at progress in US-China trade talks.
"I think gold should see itself through $1,360, a strong resistance, to get absolute confirmation that it is in a bull run," said Ross Norman, chief executive at Sharps Pixley.
Meanwhile, holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, dropped 0.5 percent to 813.29 tonnes on Monday. Holdings have fallen for a second straight session.
"On the downside, support around $1,300 should be strong in the short-term (for gold) and we favour buying dips towards that level," MKS PAMP Group said in a note.
Among other precious metals, palladium was steady at $1,364.14 per ounce.
Silver was up 0.1 percent at $15.87, while platinum slipped 0.1 percent to $816.63.
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