"The price of gold continues to be rangebound between $1,250 and $1,270 as we approach the holiday week," said Walter Pehowich, executive vice president of investment services at Dillon Gage Metals. "Many on Wall Street seem to have flattened out their books and are getting ready for the new year after the Christmas break."
Prices are on track to register their narrowest trading range in the last quarter of 2017 than any quarter in a decade.
"Gold is coming up from a cyclical bottom. It's going to get quieter due to the upcoming holiday-long weekends," said Mun Chun Loh, director, Private Wealth at GoldSilver Central Pte Ltd in Singapore.
Holdings of the world's largest gold-backed exchange-traded fund, New York-based SPDR Gold Shares , fell 1 percent over Monday and Tuesday to the lowest level since early September.
But low prices have spurred demand for physical gold in China, with local premiums approaching $11, said MKS PAMP trader Sam Laughlin. Goldman Sachs said in a research note it expected gold prices to fall further, reaching $1,200 an ounce by mid-2018.
"We see the decline in gold as evidence that 'fear' effects, which had been keeping gold supported, have at least partially moderated as U.S. tax reform and the transition to a new (U.S. Federal Reserve) chair appear to be going smoothly," it said.
On the technical side, resistance was at the 200-day moving average at $1,269.15 an ounce and momentum indicators suggested gold would extend its recent rise if it remained above a Fibonacci level of $1,260.50, said analysts at ScotiaMocatta.
Among other precious metal prices, palladium gained 0.5 percent to $1,026.97, not far from last week's peak of $1,038, the highest since February 2001.
Spot silver was up 0.3 percent at $16.17 an ounce, while platinum was 0.2 percent higher at $915.74 an ounce, after both rose to 2-1/2-week highs.