Dollar Strength Pushes Gold Prices Down Ahead of Fed Decision

Gold prices fell on Tuesday due to a stronger dollar, which made gold more expensive for holders of other currencies. Spot gold declined 0.7% to $4,044.81 per ounce, while U.S. gold futures for August delivery lost 0.8% to $4,045.40.

The dollar held near a one-month high, and markets are waiting for clues from the Federal Reserve's upcoming policy decision on Wednesday. The Fed meeting will conclude its two-day policy session, with expectations that it will hold interest rates steady standing at 62%. However, 38% of market participants expect at least a 25-basis-point rate hike.

Ilya Spivak, head of global macro at Tastylive, said the market is waiting for Fed signals and expects gold to rally above $4,200 per ounce if the meeting generates language that's not setting the groundwork for a rate hike in September.