Gold prices were subdued on Tuesday as a slight uptick in the dollar countered support from falling Treasury yields, while investors await U.S. economic data due this week that could further illuminate the Federal Reserve's interest rate path.
Spot gold was steady at US$2,025.70 per ounce as of 0939 GMT. U.S. gold futures were also flat at US$2,040.70.
"The market got a little bit too excited after the FOMC meeting, betting on big rate cuts next year, but several members are not yet ready and still regard that the risk of inflation has not yet been overcome completely," said Quantitative Commodity Research analyst Peter Fertig.
Fed Chair Jerome Powell said last week that the central bank's monetary policy tightening is likely over, with a discussion of cuts in borrowing costs coming "into view."
While some Fed officials have pushed back against surging market expectations of rate cuts, the remarks have done little to change investor sentiment.
Markets are still pricing in about a 70 per cent chance of a rate cut in March, according to the CME FedWatch tool.
"Supporting gold, on the other hand, is that the yields on government bonds are coming down, which is reducing the opportunity costs of holding gold," Fertig added.
Investors are awaiting a slew of U.S. economic data this week, including the November core personal consumption expenditure (PCE) index report, the Fed's preferred measure of underlying inflation on Friday.
Elsewhere, the Bank of Japan maintained ultra-loose monetary settings as expected, underscoring policymakers' preference to await more clues on whether wages will rise enough to keep inflation durably around its 2.0 per cent target.
Spot silver gained 0.6 per cent to US$23.91 per ounce, while platinum fell 0.2 per cent to US$943.37 and palladium rose 0.1 per cent to US$1,184.65. - Reuters