US gold futures settled fractionally higher on Tuesday as traders played it safe before hearing the Federal Reserve's decision on US interest rates and after Monday's hefty sell-off, dealers said. In other precious metals, silver closed at a fresh six-week low while platinum and palladium prices were mixed. Gold for April delivery at the COMEX division of the New York Mercantile Exchange gained 20 cents to $431.60 an ounce, after barely moving within a $430.30-to-$432.80 range.
Prices on Monday sank 1.9 percent to end at $431.40, the lowest settlement since March 3, as the dollar rallied sharply.
Higher rates tend to prop up the dollar and thus reduce investment in gold, as foreign investors end up putting more money into dollar assets.
Frank Aburto at FC Stone Aburto saw the yellow metal primed for further advances from its $430 support area, however, mainly on ideas the dollar will soon begin to weaken again.
"I still see the market at around $450, but it may take a little while due to the dollar's strength in the last few days," he added.
The dollar was just off from its two-week high against the euro, with many markets nearly frozen before the Fed's decision.
The euro was trading around $1.3198 by early afternoon, compared with $1.3164 late on Monday.
A stronger US currency tends to depress gold as it makes the dollar-denominated commodity costlier for non-US buyers.
Spot gold was at $431.00/1.75 an ounce, not far from Monday's New York close at $431.00/1.50. The afternoon London fix on Tuesday was $432.15.
"Support (in bullion) should be strong between $428-430 but the lack of physical interest does suggest further downside movements, initially targeting $426 with $422/20 below," TheBullionDesk.com said in a report.
May silver fell 3.4 cents to $7.078 an ounce, the weakest close since February 10, after trading from $7.165 to $7.05.
Chartists put support at $7.00 and resistance at $7.55.
Spot silver slid to $7.04/07, versus $7.08/10 previously. It fixed at $7.11. April platinum shed $4.70 to end at $865.50 an ounce. Spot platinum was last at $862/866.
June palladium climbed 50 cents to $200.55 an ounce. Spot palladium hit $198/201.