Dollar Strength and Fed Expectations Weigh on Gold Price

The value of gold has declined as the US dollar holds near its highest level in a month.

This shift is being closely watched ahead of the Federal Reserve's upcoming policy meeting, where interest rates are expected to remain unchanged.

However, futures markets are now pricing in a 36.3% chance of a quarter-point hike at the next meeting, up from 16% last week, and an 81% chance of a hike in September according to the CME Group's FedWatch tool.

This increased expectation of tighter monetary policy is putting pressure on gold, which doesn't pay interest. A stronger dollar also makes gold more expensive for buyers using other currencies, causing spot gold to fall 0.5% to $4,056.03 an ounce.