Gold prices remain range-bound during Tuesday's Asian trade amid subdued holiday trading volumes.
By 2 pm AEDT (3 am GMT) spot gold prices were up by $4.27 or 0.2% at US$2,617.03 per ounce.
The yellow metal attempted to recover losses of 0.4% on Monday but faced resistance due to a strengthening U.S. dollar and firm Treasury yields.
The Federal Reserve's hawkish stance during its December meeting continues to weigh on gold prices. Despite lowering its policy rate by 25 basis points to 4.25%-4.50%, the Fed's projections signalled slower-than-expected rate cuts through 2025.
The ongoing preference for U.S. dollars, driven by its safe-haven appeal during the holiday season and expectations of higher interest rates, limits gold's upside.
In addition, rising inflation expectations, amplified by protectionist policies, further reinforce the case for a firmer dollar, making gold less attractive.