Gold bars are displayed at a gold jewellery shop in the northern Indian city of Chandigarh
Gold bars are displayed at a gold jewellery shop in the northern Indian city of Chandigarh May 8, 2012.

Gold prices eased in a narrow range on Tuesday, as an elevated dollar and impending interest rate hikes overpowered support from underlying concerns over the global economic outlook.

Spot gold was down 0.2% at $1,805.20 per ounce at 0725 GMT, while U.S. gold futures gained 0.4% to $1,807.80.

The dollar firmed, heading back towards two-decade peaks, and continued to chip away at demand for greenback-priced gold among buyers holding other currencies. [USD/]

"Overall, gold's price action is still underwhelming, setting a series of lower daily highs over the past month," OANDA senior analyst Jeffrey Halley said. That suggests the downside remains the likelier path of travel, he added.

Bullion has been pressured in the past few months by major central banks around the world moving to hike interest rates in their attempt to tame runaway inflation.

The general move lower in U.S. yields seems to be delaying the inevitable correction in prices of non-yielding gold, Halley said, which peaked at above $2,000 an ounce in March following Russia's invasion of Ukraine.

Resuming trade after a weekend extended by the Independence Day holiday, benchmark U.S. 10-year Treasury yields recovered slightly from Friday's one-month low, but remained below 3%. [US/]

"While we are stuck in the $1,790 to $1,830 range, gold could be supported on recession worries and possibly the Federal Reserve softening their policy stance as the market pivots from inflation concerns," said Stephen Innes, managing partner at SPI Asset Management.

Gold is seen as a safe store of value during times of economic crises, like a recession.

Meanwhile, Asian shares posted their biggest daily rise in a week on Tuesday, though fears of a global recession and high inflation tempered the mood. [MKTS/GLOB]

Spot silver gained 0.2% to $19.99 per ounce, while platinum fell 1.1% to $876.02 and palladium climbed 0.5% to $1,931.92.

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