Gold prices edged lower on Tuesday, pressured by a stronger dollar, while markets looked to the Federal Reserve’s upcoming policy decision for clues on the interest rate outlook.

Spot gold fell 0.5% to US$4,056.03 per ounce by 0110 GMT. US gold futures for August delivery lost 0.5% to US$4,056.70.

President Donald Trump said on Monday that the United States was having “good talks” with Iran and there was a chance of a deal over their conflict, but warned that US strikes would resume if the negotiations failed to deliver.

Despite Trump’s optimism, Tehran appeared to quickly test the pause in the US military campaign, with Saudi Arabia, Jordan and Iraq reporting drone attacks on Monday.

The dollar held near a one-month high as traders weighed chances of a rate hike at the Federal Reserve’s upcoming meeting, making greenback-priced bullion more expensive for holders of other currencies.

The US Federal Reserve will begin its two-day policy meeting on Tuesday, and is expected to hold interest rates steady on Wednesday.

Expectations for a rate hike of at least 25 basis points are pegged at 36.3%, according to CME FedWatch, up from 16% a week ago. Markets are pricing in an 81% chance for a hike at the central bank’s September meeting.

President Donald Trump on Monday called on the Federal Reserve to lower interest rates, saying the US should have the lowest interest rate in the world.

China’s net gold imports via Hong Kong more than doubled year-on-year in June, but slipped over 5% from the previous month, data from Hong Kong’s Census and Statistics Department showed on Monday.

Gold Fields submitted a “lease-renewal proposal” to Ghana this month for its Tarkwa gold mine, the company said on Monday.

Spot silver fell 1.7% to US$57.39 per ounce, platinum lost 0.8% to US$1,608.20 and palladium slid 1.5% to US$1,272.25.

Source: theedgemalaysia