Gold Prices Struggle Ahead of Fed Decision Amid Stronger Dollar

Gold prices have been under pressure ahead of the Federal Reserve's interest rate decision on Wednesday. Spot gold traded at $4,045.89 per ounce and US gold futures were at $4,046.20 as the US dollar stayed near a one-month peak, raising the cost of the precious metal for overseas buyers.

The strengthening US dollar is making gold more expensive, which is weighing on prices. Additionally, growing market expectations of a more aggressive Federal Reserve are also contributing to the decline in gold prices.

Despite this, physical demand from Asia remains strong, with China's net gold imports via Hong Kong doubling in June from a year earlier and China's central bank posting its highest monthly increase in gold reserves in over two years.

The market is waiting to see whether XAU/USD can maintain the $4,021 support level prior to the Fed's announcement on Wednesday. If the price closes above $4,080, it could signal a bullish breakout from the triangle formation and pave the way for $4,220.