Gold prices inched up on Tuesday and analysts noted that the non-yielding metal's outlook remains positive as latest commentary from Federal Reserve officials and data point towards bigger U.S. interest rate cuts.

Spot gold rose 0.3% at $2,413.90 per ounce by 1134 GMT. Bullion fell as much as 3% in the previous session, caught in a global sell-off driven by fears of a U.S. recession.

U.S. gold futures gained 0.5% to $2,455.30.

Fed policymakers pushed back against the notion that weaker-than-expected July jobs data means the economy is in recessionary freefall, but also warned that rate cuts will be needed to avoid such an outcome.

"Gold has been volatile in recent days due to the high liquidity of the yellow metal. Margin calls in other asset classes likely resulted in some gold holdings having been sold to cover losses in other positions," UBS analyst Giovanni Staunovo said.

"We retain our positive outlook for gold, targeting a price of $2,600 by the end of the year. The next move higher in gold will come by when the Fed starts its rate cut cycle."

Traders see a 113 basis points (bps) of easing this year from the Fed, with a 81% chance of 50 bps cut in September versus over 10% last week.

Bullion is considered a safe asset amid geopolitical and economic uncertainties and tends to thrive in a low interest rate environment.

Elsewhere, India's gold industry, with the support of the World Gold Council, has established a self-regulatory organisation.

Spot silver fell 0.7% to $27.09 per ounce while platinum rose 0.7% to $912.40.

Palladium gained 0.3% to $852.57 after hitting its lowest levels since 2017 on Monday on recession fears.

"Palladium shorts continue to be a recession proxy within precious," Nicky Shiels, head of metals strategy at MKS PAMP SA, wrote in a note.

(Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Mrigank Dhaniwala)