Gold prices on Tuesday traded in a tight range. Moreover, investors maintained a cautious stance ahead of this week’s policy meeting by the Fed where the U.S. central bank is likely to rise interest rates to tame high inflation.
Spot gold were flat at $1,676.80 per ounce, as of 0037 GMT.
U.S. gold futures inched up 0.5 percent at $1,686.70.
The U.S. Fed is expected to increase interest rates by 75 basis points, with markets even seeing a 19 percent chance for a 100 bps increase.
Gold prices weakened on Monday, float toward a 29-month low hit on Friday, as the U.S. dollar and Treasury yields firmed on expectations of a hefty Fed rate hike.
Even though the dollar index dropped 0.3 percent, it wasn’t far from a 20-year high.
The benchmark 10-year Treasury yield stabled to its highest level in over a decade scaled on Monday.
Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, dipped 0.30 percent to 957.95 tons on Monday from 960.85 tons on Friday.
