Investing.com-- Gold prices edged lower on Tuesday, extending losses into a fourth straight session as markets hunkered down before a Federal Reserve meeting this week, while copper saw some strength as focus remained on Chinese stimulus measures.
Strength in the dollar and Treasury yields also pressured metal prices, as investors pivoted into the greenback in anticipation of the Fed meeting.
The recent losses saw gold pull back towards the $1,950 an ounce level, which is expected to be tested as a support as markets fret over the upcoming Fed decision.
Spot gold fell slightly to $1,954.34 an ounce, while gold futures expiring in August fell 0.3% to $1,955.75 an ounce by 20:08 ET (00:08 GMT).
The Fed is widely expected to hike interest rates by 25 basis points at the conclusion of a two-day meeting on Wednesday, although markets are expected to have already priced in the hike.
A key point of uncertainty for traders is what the central bank will signal with regards to its plans for future rate hikes. Fed Fund future prices show that the central bank is expected to announce an extended pause in its rate hike cycle after Wednesday's hike.
But given that U.S. inflation is still trending well above the Fed’s annual target, the bank could still potentially signal at least one more rate hike this year.
Rising interest rates bode poorly for non-yielding assets such as gold, given that they push up the opportunity cost of holding bullion. This trade battered gold through 2022, and has limited gains in the yellow metal so far this year.
The outlook for gold also remains uncertain, given that U.S. rates are likely to stay higher for longer.
Among industrial metals, copper prices rose slightly on Tuesday, extending gains from
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