WASHINGTON (dpa-AFX) - Gold prices drifted lower on Tuesday as the dollar firmed against several major currencies ahead of the Federal Reserve's interest rate decision, due on Wednesday.
The Fed is widely expected to raise interest rates by another 75 basis points. Some analysts see an outside chance for a 100 basis point rate hike.
CME Group's FedWatch Tool is currently indicating an 84% chance of a 75 basis points rate hike and a 16% chance of a 100 basis point rate hike.
Treasury yields are seeing further upside ahead of the Fed announcement, with the yield on the benchmark ten-year note jumping to a new eleven-year intraday high.
The dollar index surged to 110.26, gaining about 0.5%.
Gold futures for December ended lower by $7.10 or about 0.4% at $1,671.10 an ounce.
Silver futures for December ended down by $0.175 at $19.183 an ounce, while Copper futures for December settled at $3.5030 per pound, down $0.0095 from the previous close.
Sweden's central bank raised its benchmark rate at a sharper-than-expected pace on Tuesday citing high inflation.
The Executive Board of Riksbank decided to raise the key interest rate by 1 percentage point to 1.75%. Markets widely expected a 75 basis-point rate hike.
Several other central banks, including the Bank of England, the Bank of Japan, the People's Bank of China, and the Swiss National Bank, are scheduled to announce their rate decisions this week.
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