BENGALURU - Gold prices slipped on Tuesday, pressured by a stronger dollar, while investors focused on North Korea tensions and remained cautious ahead of an annual central banking meeting in Jackson Hole later this week.
Spot gold was down 0.4 percent at $1,285.48 an ounce, as of 0728 GMT, after ending 0.5 percent higher in the previous session.
U.S. gold futures for December delivery fell 0.6 percent to $1,289.10 per ounce.
"The U.S. and South Korea's military training will probably induce some move from North Korea. I think people are getting ready for any move so that's why gold came back up yesterday," said Yuichi Ikemizu, Tokyo branch manager at ICBC Standard Bank.
The United States and South Korea began long-planned joint military exercises on Monday, heightening tensions with North Korea, which called the drills a "reckless" step toward nuclear conflict.
"The dollar is a bit stronger and that's why gold is coming off a bit. People are really kind of cautious about the market with this North Korea and U.S. situation and also the Jackson Hole meet later this week."
The dollar index, which tracks the greenback against a basket of six major rivals, was up 0.2 percent at 93.293.
Investors are awaiting the U.S. Federal Reserve's annual central bank conference in Jackson Hole, Wyoming, this week for clues on monetary policy outlook, with the European Central Bank chief Mario Draghi and Fed Chair Janet Yellen set to speak at the event.
"Geopolitics are still flashing on trader dashboards and they remain risk-averse. The Jackson Hole meeting is the chief event for this, and it is pretty much safe to say that we are very dubious about getting anything new from the meeting, but traders still want to hedge their risk ahead of any unexpected outcome," said Naeem Aslam, chief market analyst, Think Markets.
"We do expect a mammoth move in the gold price if there is any kind of surprise from the ECB or the Fed," Aslam said.
Gold is highly sensitive to rising interest rates because they increase the opportunity cost of holding non-yielding bullion, while boosting the greenback.
Spot gold may retest a support at $1,282 per ounce, as its correction from the Aug. 18 high of $1,300.80 has not completed, said Reuters technical analyst Wang Tao.
Palladium was down 0.5 percent at $934.50 an ounce, after earlier touching a more than 16-year high at $940.
Silver edged down 0.3 percent to $16.92 an ounce, and platinum slipped 0.1 percent to $976.60.
(Reporting by Apeksha Nair in Bengaluru; Editing by Joseph Radford and Sherry Jacob-Phillips)