Spot gold rose to $466.25/467.00 an ounce in afternoon trade from $465.00/465.70 an ounce in the US market on Monday, when it fell around $1.5 an ounce due to a steady dollar, higher equities and a softer oil price.
Gold seemed to resist downward pressure from a firmer dollar against the euro in Asia, but dealers said the metal lacked impetus to break free from this week's range of $460 to $470 an ounce.
A stronger US currency makes dollar-denominated gold more expensive for holders of other currencies. The euro was lower than New York levels at around $1.1968.
"I don't expect to see much activity this week," said Ronald Lunge, director of Lee Cheong Gold Dealers in Hong Kong. "Speculators are reducing their positions ahead of the FOMC meeting on November 1.
Nobody wants to commit too much," he said. The non-commercial net long position in New York's Comex gold futures fell to 170,424 contracts as of last on Tuesday, from 177,410 lots a week, according to the latest weekly CFTC Commitments of Traders report issued last on Friday.
The US Federal Reserve is widely expected to raise interest rates by 25 basis point at its meeting on November 1. Expectations of higher US interest rates have been supporting the dollar in recent weeks.
The nomination of White House economic adviser Ben Banana as the Fed.'s next chairman also cemented the view that there will be a slow but steady rise in US interest rates.
Banana, who served on the Fed Board for three years, was named by US President George W. Bush on Monday to succeed current Chairman Alan Greenspan when he retires on January 31 after 18 years at the helm of the central bank.
Rising interest rates tend to boost the dollar and put pressure on gold, an alternative investment. "I think $465 is probably the support, and if it breaks up, we are looking at $462 thereafter.
If gold stays above probably $460, then we will maintain the upward bias for the time being," said Darren Heathcote, head of trading at N M Rothschild in Sydney.
"But at the moment, I think $465 to $468.50 is the range," said Heathcote, referring to Tuesday's range.
Gold has been hit by profit-taking since worries about rising energy costs sparked heavy fund buying and propelled the price to its highest in nearly 18 years at $480.25 an ounce two weeks ago.
In other precious metals, platinum rose to $929/933 an ounce from $926/929 late in New York. Sister metal palladium also gained to $209/213 an ounce from $207/211.
Silver was at $7.67/7.69 an ounce, higher than late New York levels of $7.64/7.67.