By Clara Denina
LONDON (Reuters) - Gold edged lower on Tuesday, as the dollar and European shares recovered some of the previous session's losses, while uncertainty over the timing of a pullback in the U.S. Federal Reserve's stimulus programme continued to unnerve investors.
The metal had risen nearly two percent on Monday, when data showed U.S. manufacturing activity had slowed to the lowest level in nearly four years, weakening arguments for the Fed to slow its $85 billion monthly bond-purchase scheme.
The central bank said in May that it would scale back its easing sooner if economic indicators showed signs of continued strengthening.
U.S. economic data will therefore remain in focus this week - monthly non-farm payroll figures will be released on Friday - in the run-up to the Federal Reserve's next policy meeting later in June.
Spot gold fell 0.4 percent to $1,405.50 an ounce by 0926 GMT. U.S. gold futures for August delivery fell 0.5 percent to $1,405.10 an ounce.
"The market is really focused on the U.S. data and on when the Fed is going to step back from quantative easing," Saxo Bank senior manager Ole Hansen said.
"Gold received a lift from the weaker dollar and lower yields yesterday after disappointing manufacturing data but short sellers in gold are still pretty stubborn and we are still in a wait-and-see period ahead of more U.S. data this week."
The dollar index rose 0.2 percent, while European shares also partially recovered Monday's losses, tracking a 2-percent gain in the Japan's Nikkei stock index.
In bond markets, U.S. 10-year Treasury yields were steady above 2.1 percent, bolstered by comments of two top Fed officials that the central bank could reduce bond buys this summer if the economy improved.
As gold has no interest rate, the rise in returns from U.S. bonds and other markets is seen as a negative signal.
Strong physical demand in Asia and a pause in outflows from exchange-traded funds have supported gold prices over the past week.
India's gold imports jumped to around 162 tonnes in May from 142.5 tonnes in April. The data raised fears that India, the world's biggest bullion buyer, could impose more restrictions on imports in an effort to decrease its deficit.
"We expect imports to moderate in coming months given some of the surge in demand probably represents purchases brought forward in response to recent price falls," Macquarie said in a note.
Holdings of New York's SPDR Gold Trust, the largest gold-backed exchange-traded fund, remained unchanged on Monday for the fourth day in a row.
Silver fell 0.7 percent to $22.56 an ounce. Platinum was down 0.3 percent to $1,488.24 an ounce, having touched a 2-1/2 week high at $1,503.50 on Monday, due to continued supply disruptions in top supplier South Africa. Palladium lost 0.7 percent at $750.97 an ounce.
(Additional reporting by A. Ananthalakshmi in Singapore; Editing by Pravin Char)
