Gold muted on Tuesday post experiencing steep plunge during the earlier week triggered by strength in the greenback, eyes are no squarely focused on yellow metal for possibly touching key support level.

Spot gold stabilized at $2,026.33 per ounce, while gold futures muted at $2,042.40 per ounce.

Rising worries about longer-term increases in U.S. interest rates continued to cloud the short-term gold outlook, more so now that markets have started to factor in the likelihood that the Fed would hold interest rates steady until June.

The main forces behind this idea were the Fed Chair Jerome Powell's hawkish remarks and the robust U.S. economic figures, with the previous two sessions seeing significant drops in gold prices as triggered by both factors.

The greenback soared hovering close to the highest level in three months, while treasury yields advanced significantly, considering the rates that will stay higher for longer.