As the dollar suffered from disappointing U.S. service sector statistics and speculation that the world's largest economy was slowing, gold prices stabilized on Tuesday after recording small gains in the previous session.

Spot gold steadied at $1,961.16 per ounce meanwhile gold futures added 0.2% to $1,977.45 per ounce.

The U.S. service sector barely expanded in May, ending months of strong growth as the labor market lost pace, according to statistics released on Monday. The yellow metal rebounded from nearly two-month lows.

The figures caused the dollar to experience some losses, causing it to retreat from recent highs of about 11 weeks. Most metal markets profited from this, especially safe-haven assets like gold.

Gold was trading mostly in a range, despite recent advances, as investors braced themselves for the Federal Reserve's interest rate decision next week. After receiving contradictory signals regarding the decision over the previous week, traders are divided over whether Fed will raise or halt interest rate hikes.

Despite the positive surprises in the inflation and labor market data, several Fed officials urged the institution to stop its rate hike cycle and evaluate the tightening of monetary policy over the previous year.