NEW YORK: Gold prices crept higher for a second straight session on Tuesday, underpinned by a retreat in the dollar, but gains were kept in check by prospects of further large Federal Reserve interest rate hikes.

Spot gold was up 0.1% at $1,651.50 per ounce by 12:37 p.m. ET (1637 GMT). US gold futures fell 0.4% to $1,656.60.

“You’re getting relief in yields (and) the dollar rally has definitely hit a major hurdle ... gold, at the very least, has not seen selling pressure return - it’s somewhat stabilizing,” said Edward Moya, senior analyst with OANDA.

The dollar hit its lowest level since Oct. 6, making bullion cheaper for overseas buyers. Treasury yields were also lower.

“But in the end, the primary catalyst (for gold) will be the Fed’s rate hiking cycle,” Moya said.

Expectations of a large Fed interest rate hike were cemented following a red-hot US consumer inflation print last week, with markets pricing in a 75 basis point hike in November.

Rising interest rates dim gold’s appeal as they increase the opportunity cost of holding the non-yielding asset.

Meanwhile, the deputy governor of Russia’s central bank, Alexei Zabotkin, said on Tuesday that a further increase in gold and forex reserves is inappropriate for now, as it would give an impetus to growth in the money supply.

Elsewhere, spot silver rose 0.1% to $18.69 per ounce.

“The main fixation of gold and silver traders remains the daily price direction of the US dollar index,” Jim Wyckoff, senior analyst at Kitco Metals, said in a note.

Platinum shed 1.3% to $903.57 after hitting a 1-1/2-week high earlier, while palladium added 0.8% to $2,015.28. Platinum “continues to benefit from a robust recovery in automotive demand across the globe, with the European Union’s new vehicle registrations rising 9.6% year-over-year,” TD Securities said in a note.