(Reuters) - Gold prices were set to wrap up their best quarter since June 2020 on investor expectations the U.S. Federal Reserve will slow its interest rate hikes after its fast-paced hiking cycle kept bullion gains in check.
Bullion is only down about 0.7% so far in 2022, and has risen nearly $200 from a more than two-year low hit in September.
On the last trading day of the year, spot gold had steadied at $1,816.05 per ounce by 1046 GMT, while U.S. gold futures fell 0.3% to $1,821.30.
Gold is expected to remain range-bound due to low market participation, and prices could rise further once it breaks above resistance at $1,840, said Vandana Bharti, assistant vice-president, commodity research at SMC Global Securities.
However, analysts said it would be hard to read too much into the intraday moves given many traders have taken time off for the end of the year.
"For most of the year, gold was under pressure from a hawkish Fed. But by the end of the year, it saw some recovery and got a lifeline on expectations that the Fed might slow down," said Ilya Spivak, head of global macro at Tastytlive.
Gold, a non-interest-paying asset, has seen demand take a hit from higher rates since March, when prices reached a near record level of more than $2,000 an ounce.
Gold price moves will continue to be dictated by the Fed's response to bubbling inflation in 2023, analysts have said.
Bharti also said investment in gold ETFs could improve in 2023, adding central banks are aggressively buying gold, "a hint that they don't have much confidence in the global economy and are opting for safe-haven gold".
In other metals, spot silver rose 0.1% to $23.90 per ounce, platinum added 0.2% to $1,056.93.
Palladium fell 1.2% to $1,792.85.
Silver and platinum were both on track for a yearly rise, while palladium was headed for an annual decline of over 5%.