Gold prices struggled for direction in early Asian trading on Tuesday as traders braced for a widely anticipated rate hike along with monetary policy clues from the U.S. Federal Reserve over the next two days.
Spot gold rose 0.2% to $1,958.20 per ounce by 0119 GMT, while U.S. gold futures fell 0.1% to $1,959.90.
The dollar index was at a near-two-week peak, weighing on gold as a stronger dollar makes bullion more expensive for buyers holding other currencies.
Markets are fully priced for quarter-point rate hikes from the Fed and the European Central Bank. So, the focus will be on what Fed Chair Jerome Powell and ECB President Christine Lagarde say about the future and their September meetings.
Gold is highly sensitive to rising interest rates as they increase the opportunity cost of holding non-yielding bullion.
A closely-watched purchasing managers’ survey on Monday showed that U.S. business activity slowed, while that of Europe shrunk more than expected in July, implying that both central banks could be close to the end of their rate-hike cycles.