Dollar Surge Sinks Gold Ahead of Fed Decision

Gold prices plummeted on Tuesday as the US dollar continued to rise ahead of the Federal Reserve's monetary policy decision. The spot gold price fell by 0.7% to $4,044.81 per ounce, while U.S. gold futures for August delivery slipped 0.8% to $4,045.40.

The strong dollar has made dollar-priced gold more expensive for holders of other currencies, contributing to the decline in prices. Ilya Spivak, head of global macro research at Tastylive financial content network, noted that 'We are swinging in this tight range between $3,950 and $4,200, and I think the market is just waiting for signals from the Federal Reserve.'

Markets are pricing in a high probability of an interest rate hike by the Fed. CME Group's FedWatch tool shows a 62% chance that the Federal Reserve will keep interest rates unchanged, while 38% expect a rate hike of at least 25 basis points, up from 16% a week ago.