Gold steadied on Tuesday as a weakening dollar made it cheaper for overseas buyers, while investors awaited more cues from top central banks on their monetary policy plans.

Spot gold was little changed at $1,709.59 per ounce by 1301 GMT, after hitting a session high of $1,718.19 earlier. US gold futures fell 0.2% to $1,707.20.

While the dollar index shed 0.7% to lift gold, UBS analyst Giovanni Staunovo said prices were likely to see more volatility in the run-up to US manufacturing data due late this week, which could influence the size of the Fed’s next rate hike.

Rate hikes tend to lift bond yields, raising the opportunity cost of holding zero-yield gold.

“Additional liquidation of exchange-traded funds can be expected, with gold prices likely to drop to $1,600/oz by year-end,” Staunovo added.

The S&P Global US manufacturing purchasing managers’ index reading is due on Friday.

The US Federal Reserve meets on July 26-27.

Gold recoups some losses on dollar weakness

Meanwhile, euro zone bond yields jumped and the euro rallied on news that the European Central Bank would discuss this week whether to raise rates faster than expected.

“A surprise from the ECB, hiking more than the assumed 25 bps could weaken the dollar and provide support for gold,” said Ricardo Evangelista, senior analyst at ActivTrades, adding the metal was likely to remain under pressure, with significant resistance around $1,750.

Gold has not been able to capitalise on its safe-haven status recently, despite recession fears. It has declined more than $350 from a level above $2,000 an ounce that it scaled in early March due to the Fed’s aggressive rate hike plans and the dollar’s recent rally.

Spot silver rose 0.7% to $18.80 per ounce, platinum gained 1.9% to $879.43, while palladium added 0.5% to $1,864.61.