By A. Ananthalakshmi
SINGAPORE (Reuters) - Gold retained overnight gains on Tuesday but was stuck below $1,200 an ounce as investors waited on U.S. nonfarm payrolls later in the week for clues on when the Federal Reserve will hike interest rates.
Spot gold was little changed at $1,186.91 an ounce by 0332 GMT. The metal gained 0.8 percent on Monday, snapping a three-day losing streak, buoyed by holiday-thinned trading.
Silver gained for a third straight session, after climbing to a four-week high on Monday.
"The market will remain focused on the U.S. payrolls number to be released this week," said ANZ analyst Victor Thianpiriya. "A weak print could see gold push above $1,200."
Doubts still persist over the robustness of the U.S. economy as recent data has been mixed, with many traders pushing expectations of a rate hike from June to later this year.
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Strong data could prompt the Fed to raise interest rates soon, a move seen by investors as denting demand for bullion, which doesn't pay interest. Speculation over the timing of a rate hike has kept markets on edge.
Chicago Fed President Charles Evans on Monday provided no clarity on the issue. He said rate hikes could begin this year, although with inflation uncomfortably low and the unemployment rate still too high, the Fed should hold off on raising rates until early next year.
An early rate hike this year is not as unlikely as markets believe, said Mark To, head of research at Hong Kong's Wing Fung Financial Group.
"Gold prices are going to move around $1,200 because of the uncertainty over the timing. The dominant factors influencing gold are interest rates and monetary policy," said To.
Bullion investors were also eyeing the currency markets for cues.
The dollar was slightly firmer against a basket of major currencies early on Tuesday, advancing against the euro and sterling in thin trade with several key financial centres shut for holidays.
Further strength in the dollar could put a cap on gold's gains.
(Reporting by A. Ananthalakshmi; Editing by Michael Perry and Richard Pullin)