Gold prices rose on Tuesday on the back of the purchase of safe assets, but the upside potential was limited by the strong dollar and expectations of further increases in US interest rates.
Spot gold rose 0.1% to $ 1.313.54 an ounce at 3.25am GMT.
However, gold futures in the US for June fell 0.4% to $ 1,313.40 an ounce.
Analysts in the ANZ said in a note that rising tensions in Gaza caused some purchases of gold as a safe asset earlier in the session.
JERUSALEM (Reuters) - Israeli troops shot dead dozens of Palestinian demonstrators on the Gaza border on Monday when the opening of the US embassy in Jerusalem by the Trump administration provoked tension to boiling point after weeks of demonstrations.
The stronger US dollar and strong US bond yields on Tuesday, after a Fed official supported the stance of further US interest rates, have limited the possibility of a rally in gold.
The US central bank is widely expected to raise benchmark interest rates at its next policy meeting in June.
High interest rates tend to boost the dollar and push bond yields higher, making gold denominated in dollars more expensive for buyers in other currencies and reducing its appeal.
Federal Reserve Chairman James Pollard said on Monday that the yield curve in the United States could be reversed later this year or early 2019, a scenario that preceded the recent US recession.
Elsewhere, three ECB policy makers held an optimistic assessment of the eurozone economy on Monday, ignoring any signs of slowing inflation and activity.
SPDR Gold, the world's largest gold-backed fund, fell 0.17% to 856.17 tons on Monday.
In other precious metals, silver did not change at $ 16.50 an ounce.
Platinum rose 0.2% to $ 906.50 an ounce, while palladium was 0.1% lower at $ 994.50.