Dollar Strength Sends Gold Prices Tumbling Ahead of Fed Decision

Gold prices fell on July 28 due to a stronger US dollar, as investors waited for the Federal Reserve's upcoming policy decision. The Fed will conclude its two-day meeting on July 29, with expectations that it will hold interest rates steady at 62 per cent, while 38 per cent of market participants expect a 25-basis-point rate hike.

Ilya Spivak, head of global macro at Tastylive, said the market is waiting for Fed signals and if the meeting generates language that does not set the groundwork for a rate hike in September, gold could rally above US$4,200 per ounce.

The dollar's strength made greenback-priced bullion more expensive for holders of other currencies. Spot gold fell 0.6 per cent to US$4,051.07 per ounce, while US gold futures for August delivery lost 0.6 per cent to US$4,051.60.

The prices of spot silver, platinum, and palladium also declined, with silver falling 1.6 per cent to US$57.48 per ounce, platinum losing 0.6 per cent to US$1,611.48, and palladium sliding 1.4 per cent to US$1,274.10.