Gold Prices Sink as Strong Dollar and Rate Hike Fears Weigh

Gold prices fell by 0.5% on Tuesday, weighed down by a strong US dollar, which makes gold more expensive for holders of other currencies. The price of spot gold dropped to $4,056.03 per ounce, while US gold futures for August delivery lost 0.5% to $4,056.70.

The Fed's upcoming policy decision is expected to provide clues on the interest rate outlook. President Trump has called on the Federal Reserve to lower interest rates, saying the US should have the lowest interest rate in the world. However, markets are pricing in a 36.3% chance of a rate hike at the central bank's meeting.

The dollar held near a one-month high as traders weighed chances of a rate hike at the Federal Reserve's upcoming meeting. China's net gold imports via Hong Kong more than doubled year-on-year in June, but slipped over 5% from the previous month. The prices of other precious metals also fell, with spot silver down by 1.7%, platinum losing 0.8%, and palladium sliding 1.5%.