Dollar Strengthens, Gold Prices Tumble Amid Fed Decision Anticipation

Gold prices dipped slightly on Tuesday as the dollar strengthened to near one-month highs. Spot gold fell by 0.7% to $4,049.12 an ounce, while U.S. Gold Futures slipped a similar amount to $4,049.10.

The US Dollar Index hovered around a one-month high, making dollar-priced bullion more expensive for overseas buyers. Markets broadly expect the Federal Reserve to leave interest rates unchanged when its two-day meeting concludes on Wednesday.

However, traders have increased bets that policymakers could resume tightening later this year. The CME FedWatch tool shows roughly a 40% chance of a rate hike this week and an 80% probability of a September increase.