Gold prices edged lower on Tuesday, trading $100 below the record high level hit in the last session, as the dollar held firm and investors awaited more U.S. economic data this week that could influence the Federal Reserve's rate outlook.

Spot gold was down 0.3% at $2,024.30 per ounce by 1200 GMT. Bullion had climbed to an all-time high of $2,135.40 on Monday, before dropping more than $100 in a single day to close 2% lower.

U.S. gold futures were steady at $2,042.70.

"Market participants are already expecting 120 bps of rate cuts (from the Fed) in 2024. So a repricing of those expectations could result in near-volatility, particularly if upcoming U.S. economic data comes in on the positive side," said UBS analyst Giovanni Staunovo.

"That said, we expect market participants who missed out the gold rally would likely step in and buy gold on dips below $2,000/oz."

The dollar extended gains on Tuesday against its rivals, making gold more expensive for other currency holders.

Meanwhile, traders lowered their Fed rate cut bets by March next year to about 60%, from 70% early on Monday, CME's FedWatch Tool shows.

The focus now shifts to the closely watched U.S. non-farm payrolls data on Friday. The monthly JOLTS report - which captures monthly hirings and firings - is due later on Tuesday and the private-sector ADP survey on Wednesday.

Lower interest rates reduce the opportunity cost of holding the non-interest-bearing bullion.

"Gold is quite overextended short-term, and so the current selloff we are seeing is not surprising," Edward Meir, a metals analyst who provides research for Marex, said in a note.

"However, we think the complex could regroup if the dollar and rates resume their decline."

Spot silver lost 1%, to $24.24 per ounce, platinum eased 1.4%, to $905.31 per ounce, while palladium slipped 1.6%, to $962.56 per ounce.

(Reporting by Anjana Anil and Brijesh Patel in Bengaluru; Editing by Pooja Desai)