Gold futures traded modestly lower in the early part of Tuesday's Asian session as tapering concerns continue to loom large.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery inched down 0.04% to USD1,326.50 per troy ounce in Asian trading Tuesday. The December contract settled lower by 0.41% at USD1,327.00 per ounce on Monday.
Gold futures were likely to find support at USD1,291.70 a troy ounce, Wednesday's low, and resistance at USD1,375.10, Thursday's high.
While gold rallied last Thursday on news that the Federal Reserve will not taper its USD85 billion-a-month in bond purchases, the yellow metal and other precious metals have given up all of those gains and then some.
Ultra-loose monetary policies that include asset purchases drive down interest rates to spur recovery, weakening the dollar in the process and making gold an attractive hedge.
Some members of the Fed are sending mixed messages regarding tapering, adding an element of confusion to financial markets. On Friday, however, St. Louis Fed President James Bullard said that the U.S. central bank could taper its stimulus program during its October meeting, which sparked a round of profit-taking that sent gold prices falling.
However, on Monday, Federal Reserve Bank of New York President William Dudley said the stimulus program would stay in place until data show that recovery will be sustained.
"Our decisions on how to adjust our policy tools-for example, the pace of asset purchases and forward guidance with respect to the level of short-term rates-must be rooted in the ongoing flow of information that informs our judgments about the prospects for a sustainable recovery," said Dudley.
Uncertainty appears to be what is hampering gold at the moment, though may market participants are convinced tapering will happen before year-end with some expecting it will occur next month.

Silver futures declined on Monday, as uncertainty over the direction of Federal Reserve policy weighed, following last week's surprise decision to announce no reduction to its USD85 billion-a-month stimulus program.
On the Comex division of the New York Mercantile Exchange, silver futures for December delivery traded at USD21.81 a troy ounce during European morning trade, down 0.5%.Silver prices fell by as much as 2.7% earlier in the day to hit a session low of USD21.32 a troy ounce, the weakest level since September 18. The December contract ended down 5.85% at USD21.92 a troy ounce on Friday.
Silver prices were likely to find support at USD21.22 a troy ounce, the low from September 18 and resistance at USD23.07, the high from September 20.
Silver prices plunged on Friday after St. Louis Fed President James Bullard said that the Fed's decision not to taper its stimulus program in September was "close" and did not rule out a "small" reduction in bond purchases in October.
The Fed will hold its next monetary policy meeting on Oct. 29-30.
Silver prices soared by 8% on September 19 after the Fed decided to leave its USD85 billion-a-month stimulus program unchanged.
The decision surprised markets, which had been expecting the central bank to taper its monthly stimulus program by USD10 billion to USD15 billion.
Moves in the silver price this year have largely tracked shifting expectations as to whether the U.S. central bank would end its quantitative easing program sooner-than-expected.
The precious metal is on track to post a loss of nearly 29% on the year as traders bet an improving U.S. economy would lead the Fed to unwind its stimulus program by the year's end.