* U.S. core PCE data due on Friday
* Fed's Bostic: No "urgency" for rate cuts
* Gold's firm tone to prevail in the near term - analyst
Dec 20 (Reuters) - Gold prices steadied above the key $2,000 level on Wednesday, buoyed by expectations of the Federal Reserve's interest rate cuts next year, while investors awaited U.S. inflation numbers due later this week.
Spot gold was steady at $2,040.69 per ounce, as of 0914 GMT. U.S. gold futures gained 0.1% at $2,053.90.
"After the big move, the market is a bit in a wait and see mode. It may also be related to lower activity as we approach the holiday period," UBS analyst Giovanni Staunovo said.
"Market participants will, therefore, watch data which influences the monetary policy of the Fed, like inflation and job data."
The November core personal consumption expenditure (PCE) index report, the Fed's preferred measure of underlying inflation is due on Friday.
Last week, the Fed indicated its tightening phase was concluding and signalled that rate cuts may materialize in 2024.
Further progress on beating back inflation will be the decisive factor in any Fed decision next year to reduce interest rates, Chicago Fed Bank President Austan Goolsbee said.
Some Fed officials have pushed back against surging market expectations of rate cuts.
"Comments from Fed officials indicating that the market expectations on Fed cuts are a bit aggressive, have also been a factor limiting the price uptick," Staunovo added.
Lower U.S. interest rates boost the appeal of gold. Markets are pricing-in an about 75% chance of a rate cut in March, according to CME FedWatch tool.
"We forecast the firm tone to prevail in the near term but think a serious challenge to the upside will have to wait until early 2024," independent analyst Ross Norman said.
In other metals, spot silver climbed 0.1% to $24.04 per ounce, while platinum added 0.2% to $956.47. Palladium fell 1.4% to $1,206.62. (Reporting by Anjana Anil in Bengaluru; Editing by Sonia Cheema)
