Early Asian trade on Tuesday saw gold prices lingering below important levels as the dollar strengthened and Treasury yields increased as traders reexamined expectations for an impending slowdown in the Federal Reserve's interest rate rises.

Recent hawkish remarks from Fed officials caused markets to price in a higher likelihood of a rate hike in May and stoked doubts about whether the central bank will hold off on raising rates in June.

Given that higher yields raise the opportunity cost of storing the yellow metal, the likelihood of rising interest rates has a significant impact on the price of gold. Following a dramatic rise to a 13-month high last week, gold prices have fallen significantly for the following two sessions.

Spot gold muted at $1,994.80 per ounce while gold futures traded flat at $2,006.80 per ounce. After reaching close to a 2020 record high, both instruments dropped by around 2% over the last two sessions.