Gold was little changed on Tuesday, taking a breather a day after paring a 3 percent gain made last week on a rebound in the dollar, while declines in global stock markets underpinned its allure as a safe-haven asset. Tokyo's Nikkei share average fell 1.6 percent after hitting a six-month closing high the previous day.
While the dollar edged down against a basket of currencies towards Monday's four-month low but held firm versus the euro. If another sell-off hits US stocks later in the day and boosts the dollar's appeal to investors, as it did on Monday, gold could test $900 because of its failure to rise decisively above $920 in the past weeks, analysts said.
"The market doesn't have enough confidence to break this resistance" at the $918-$920 level that has been capping gold since late April, said Louis Lok, a dealer at Bank of China in Hong Kong. "Now gold could go under $900," he said.
Spot gold was at $913.20 an ounce at 0605 GMT, up 0.1 percent from New York's notional close of $912.60. On Monday it fell about 0.4 percent as the dollar rebounded from a four-month low against a basket of currencies, making dollar-priced bullion pricier for non-US investors.