There are a few ways to interpret Curley's strange behavior and his choice to keep his hand soft by wearing a glove full of Vaseline.

Whatever the ultimate reason might be, it is certainly tied to the subtly conveyed idea that Curley may be sexually impotent.

Curley is compensating for his failures as a husband by acting tough and picking on Lennie, while also admitting to his failures by keeping his hand soft. Curley is a man of appearances. He takes great pains to show people what kind of a person he is, though he keeps one hand hidden in a glove.

He is much more obvious than he can possibly know, a fact presented to us by Steinbeck through the many discussions had in Curley’s absence where he is described in purely negative terms.

Curly is a brutal, angry man who takes out his own insecurities on others.  However, like all the other characters in the book, he has an opposing dynamic, that of one who wants to maintain a certain sense of "softness" for his wife, as though to prove to her and himself that he can have a soft side.  The use of the glove and vaseline show how artificial his thoughts and feelings are, as though to keep a hand soft actually makes one soft.  his actions prove just the opposite throughout, and provide comic relief for the others who know of Curley's true nature.