Gold price consolidates in a range around $2,640 area

Gold price lacks a firm direction and is influenced by a combination of diverging forces.

Bets for a less dovish Fed underpin the USD and act as a headwind for the XAU/USD.

Trade war fears, geopolitical risks and depressed US bond yields lend some support.

Gold price (XAU/USD) struggles to capitalize on the previous day's rebound from the $2,620 region and oscillates in a narrow band during the Asian session on Tuesday. A firmer US Dollar (USD), bolstered by expectations for a less dovish Federal Reserve (Fed), is seen as a key factor undermining demand for the commodity. That said, concerns about US President-elect Donald Trump's tariff plans, persistent geopolitical uncertainty and suppressed US Treasury bond yields act as a tailwind for the precious metal.

Furthermore, traders seem reluctant and opt to wait for more cues about the Fed's rate-cut path before placing fresh directional bets around the non-yielding Gold price. Hence, the focus will remain on this week's important US macro data, including the closely watched US monthly employment details or the Nonfarm Payrolls (NFP) report on Friday. Apart from this, Fed Chair Jerome Powell's speech will play a key role in influencing the near-term USD price dynamics and provide a fresh impetus to the XAU/USD.