Gold prices fell slightly on Tuesday after a strong run-up in recent sessions, while a rebound in the dollar also pressured prices ahead of more upcoming economic data and signals from the Federal Reserve.

The yellow metal benefited from increased safe-haven demand in recent sessions, amid an escalation in military action in the Middle East. A softer dollar also benefited bullion prices.

Cryptocurrency trading firm QCP Capital has projected that Ethereum (ETH) may outshine Bitcoin (BTC) in the medium term. This outlook is based on market anticipation of a U.S.-approved Ethereum spot Exchange-Traded Fund (ETF), a development that could follow the recent approval of a Bitcoin spot ETF.

The U.S. dollar traded in a muted fashion in early European trade Monday, with a U.S. holiday limiting activity as traders consider the chances of early rate cuts by the Federal Reserve.

At 04:35 ET (09:35 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% higher at 102.242, at the start of the Martin Luther King Jr. Day holiday.

Gold prices fell in Asian trade on Wednesday, relinquishing a measure of recent gains as the dollar rebounded amid some uncertainty over the timing of the Federal Reserve’s interest rate cuts in 2024. 

The yellow metal saw a strong run-up in the final few trading days of 2023, amid growing optimism that the Fed will begin cutting rates by as soon as March 2024. Spot gold was still trading within $100 of a record high hit at the beginning of December. 

Oil prices surged higher Tuesday, bouncing after hefty losses in 2023 on rising concerns of supply disruptions through the crucial Red Sea region.

By 09:20 ET (14.20 GMT), the U.S. crude futures traded 1.4% higher at $72.33 a barrel and the Brent contract climbed 1% to $77.78 a barrel.

The U.S. dollar edged higher in early European trade Tuesday ahead of this week’s key economic data that may provide clues on the Federal Reserve's next moves.

At 04:00 ET (09:00 GMT), the US Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% higher at 101.125, recovering slightly from a five-month low after the greenback slid some 2% in 2023. 

Gold prices kept to a tight range in Asian trade on Wednesday after rising optimism over early interest rate cuts by the Federal Reserve drove a strong melt-up in prices through December. 

The yellow metal blew past key levels in recent sessions, and was now trading less than $100 below a record high hit at the beginning of the month. Gold’s recent rally was triggered by the Fed signaling it was done raising interest rates, and that it will trim lending rates in 2024. 

Oil climbed more than 2% on Tuesday to its highest level this month, as further attacks on ships in the Red Sea prompted fears of shipping disruptions and on hopes of interest rate cuts that could boost economic growth and fuel demand.

Brent crude futures settled $2, or 2.5%, higher at $81.07 a barrel, after rising as much as 3.4% during the session. U.S. West Texas Intermediate crude rose by $2.01, or 2.7%, to $75.57.

The dollar index fell on Tuesday and the euro hit a more than four-month high as investors waited on fresh clues to when the Federal Reserve is likely to begin cutting interest rates as inflation falls closer to the U.S. central bank’s 2% annual target.

Volumes were muted the day after Christmas, however, as markets in the UK, Australia, New Zealand and Hong Kong, among others, were still out for a public holiday. Many traders globally are also out for holidays until the New Year.

Momentum continues unabated, the recent milestone of surpassing 50 million nonzero-balance addresses confirms this thesis. This landmark achievement not only reflects growing user adoption but also hints at the widespread recognition of Bitcoin as a legitimate asset class. With the average holding per user now around $16,000, the implications for future price performance are significant.

The recent all-time high reached by Bitcoin underscores the robust confidence of investors and users alike. This level of participation is indicative of a maturing market that has gradually shifted from speculative trading to broader acceptance and usage. As more users continue to hold Bitcoin, the network effect intensifies, which could potentially lead to even higher price points.