Investing.com - Gold prices slipped from their highest level in around a month in North American trade on Tuesday, as market players looked ahead to the Federal Reserve's policy meeting for any new insight on the timing of the next U.S. rate hike and clues on how the central bank plans to pare back its balance sheet.
Comex gold futures were at $1,252.99 a troy ounce by 8:20AM ET (1220GMT), down $1.25, or about 0.1%. It touched its highest since June 26 at $1,259.00 in the prior session.
Gold prices finished a few cents lower on Monday, ending a six-session win streak.
The Fed kicks off its two-day policy meeting later in the day, at which it is not expected to take any action on interest rates.
Market players will pay close attention to details of when and how the U.S. central bank will start reducing its $4.5 trillion balance sheet, while looking for clues on the timing of the next rise in borrowing costs.
According to Investing.com’s Fed Rate Monitor Tool, conviction for another rate hike before the end of the year has faded, with just 35% of market players expecting another move by December, as the subdued inflation outlook raised doubts over whether policymakers will be able to stick to their planned tightening path.
The U.S. dollar sank to a fresh 13-month low against a basket of the other major currencies, with traders skeptical the outcome of the Fed's meeting would do much to alter the greenback's recent weak trend.
Focus will also be on headlines coming out of Washington, where the Senate is expected to continue working to repeal Obamacare. The investigation into U.S. President Donald Trump campaign's ties to Russia will continue to get attention.
Gold has been well-supported in recent sessions as ongoing political turmoil in the White House and weakness in the U.S. dollar spurred haven demand for the precious metal.
Elsewhere on the Comex, silver futures dipped 8.2 cents, or 0.5%, to $16.36 a troy ounce, after hitting a three-week high of $16.57 a day earlier.