By Jan Harvey
LONDON (Reuters) - Gold firmed on Tuesday as the euro recovered some lost ground against the dollar ahead of a European Central Bank meeting this week, which is expected clarify the outlook for monetary policy after mixed messages from policymakers.
The metal remained rangebound, however, on uncertainty over the timing of the first rise in U.S. interest rates in nearly a decade. A hike would weigh on gold, as it would raise the opportunity cost of holding non-yielding bullion.
Spot gold was up 0.3 percent at $1,173.75 an ounce at 0940 GMT, while U.S. gold futures for December delivery were up $1.60 an ounce at $1,174.40.
Gold touched a 3-1/2-month high last week on bets the Federal Reserve would not raise U.S. rates amid concerns about the global economy. But the rally lost steam as gold failed to break past the key $1,200 level.
"What's changed between July and today is that a Fed hike for 2015 has now been written off," ING analyst Hamza Khan said. "What's preventing us from moving much above or below $1,170 is that we still don't know whether the rate hike is going to be in early 2016 or late 2016, or how big it's going to be."
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"Until we find out, it's going to be difficult to see a sustained sell-off or a sustained rally in gold."
In the near term, gold was being influenced by fluctuations in the dollar, in which it is priced. The U.S. currency gave up some gains against the euro on Tuesday after ECB governing council member Christian Noyer said late on Monday that no adjustment was needed in the bank's quantitative easing programme. [FRX/]
The euro fell against the dollar last week on speculation the bank would provide more stimulus, after policymaker Ewald Nowotny said it was "obvious" it must search for more ways to stimulate the euro zone economy.
The ECB started buying 60 billion euros of assets every month in March to stave off deflation.
Investor appetite for gold showed signs of building on Monday, as the world's largest gold-backed exchange-traded fund, New York-listed SPDR Gold Shares, reported a 3.6 tonne rise in its holdings. [GOL/ETF]
Switzerland's gold exports to China and Hong Kong combined last month hit their highest in more than a year and half, data from the Swiss customs bureau showed on Tuesday, though exports to India fell by two-thirds.
Among other precious metals, silver was up 0.3 percent at $15.86 an ounce, while platinum was down 0.3 percent at $1,007.74 an ounce and palladium was down 0.1 percent at $680.75 an ounce.
(Additional reporting by A. Ananthalakshmi in Singapore; Editing by Mark Potter)