LONDON, April 17 (Reuters) - Gold fell on Tuesday as sharper appetite for risk benefited cyclical assets at bullion's expense, with the dollar's recovery from three-week lows versus the euro adding to pressure on the metal. Gold rallied to a 2-1/2 month high last week as heightened tensions over Syria and U.S. sanctions on Russia sparked a drop in equities and ratcheted up interest in nominally defensive assets. Those gains, however, have proved hard to maintain. Spot gold was down 0.4 percent at $1,341.23 an ounce at 1350 GMT, while U.S. gold futures were down 0.5 percent at $1,343.80. "All this noise we've been witnessing as of late, whether it is trade disputes or Syria, has not really moved gold on a sustainable basis," Julius Baer analyst Carsten Menke said. "The story would be different if these disputes prevailed and we got a significant slowdown in leading indicators. But it doesn't seem to me that anybody is really afraid of a material deterioration in the economic backdrop." A gradual return of risk appetite lifted world shares on Tuesday, with European stocks climbing 0.6 percent and Wall Street stocks opening higher after strong earnings from Netflix, Goldman Sachs and health majors. The U.S. yield curve reached its flattest in more than a decade on Monday after the White House said U.S. President Trump would nominate Richard Clarida as Federal Reserve Vice Chairman, another hawkish voice at the central bank. A flatter yield curve typically indicates that the Fed is planning to lift interest rates in the near term and is often understood to signal concern over the macroeconomic outlook. Higher rates tend to weigh on non-yielding bullion. The dollar recovered to trade up 0.2 percent versus the euro meanwhile, after the single currency hit a three-week high in earlier trade. Among other precious metals, silver was up 0.6 percent at $16.70 an ounce, while platinum was 0.4 percent higher at $930.50. Palladium was up 0.1 percent at $1,002.80 an ounce, recovering from an earlier low of $980.75. The metal hit its strongest since March 1 on Monday at $1,012.10 an ounce. It rallied nearly 10 percent last week, the biggest weekly gain since January 2017, on fears that U.S. sanctions on Russia could hurt supply of the autocatalyst metal. "Palladium has managed to reclaim the 200-day moving average and recent graphical levels at $973/963 and also breached the down channel that framed the correction since last January," Societe Generale said in a note on technicals. "$1,017 and $1,028, the two-year channel limit and the 76.4 percent retracement of the last bout of down-move, are immediate resistance levels."