Gold traded in a narrow range as traders weighed the prospect of a slower pace of interest rate cuts by the U.S. Federal Reserve next year.

Bullion prices were near $2,615 an ounce after closing down 0.4% on Monday. Investors digested the latest data on U.S. consumer confidence, which unexpectedly fell amid uncertainty over the policies of the incoming Trump administration.

Gold was steady during thin holiday trading but a stronger dollar continued to weigh on the market, Pranav Mer, an analyst at JM Financial Services Ltd. in Mumbai, said in a note on Tuesday.

Earlier this month, the Fed reined in the number of rate cuts expected in 2025 as Chairman Jerome Powell made clear that the central bank needs to see price pressures ease further. Lower borrowing costs are usually positive for bullion, which pays no interest. Read More: Fed Kicks Off 2025 with New Voters and a New View of Interest Rate Cuts

Gold has hit back-to-back records this year and is on track to close 2024 up more than 25%. Prices have been lifted by U.S. monetary easing, demand for safe-haven assets and central bank buying, but the recent rally has slowed as the dollar strengthened after the election of Donald Trump.

The Bloomberg Dollar Spot Index rose as much as 0.1% on Tuesday, after rising 0.3% in the previous session. A stronger U.S. dollar makes commodities priced in the currency more expensive for most buyers.

Source: Bloomberg