Dollar Strength Pushes Gold Down Amid Fed Interest Rate Expectations

Gold prices fell on Tuesday as the US dollar strengthened, putting pressure on gold's value. The spot price of gold dropped 0.5% to $4,056.03 per ounce by 0110 GMT.

The increase in the dollar is partly due to expectations that the Federal Reserve will hold interest rates steady at its upcoming meeting. Despite a slight decrease from last week, market analysts still expect a rate hike of at least 25 basis points with a 36.3% probability.

President Donald Trump's comments on Monday may have also contributed to the dollar's strength, as he called for lower interest rates and expressed optimism about US-Iran negotiations. However, Tehran quickly tested the pause in US military action by launching drone attacks on Saudi Arabia, Jordan, and Iraq.