Dollar Strength Weighs on Gold Prices Amid Fed Decision Anticipation

Gold prices fell modestly on Tuesday as the US dollar strengthened to near one-month highs. The yellow metal dipped 0.7% to $4,049.12 an ounce by 23:50 ET (03:50 GMT), while US Gold Futures slipped a similar amount to $4,049.10.

Traders are awaiting the Federal Reserve's policy decision and Chair Kevin Warsh's comments for clues on the outlook for interest rates. Markets broadly expect the Fed to leave interest rates unchanged when its two-day meeting concludes on Wednesday.

However, traders have increased bets that policymakers could resume tightening later this year, with markets pricing roughly a 40% chance of a rate hike this week and an 80% probability of a September increase.