Gold fell for a second straight session on Tuesday, hitting its lowest in a week, as the dollar strengthened and US bond yields rose, while traders awaited a US Federal Reserve policy meeting for cues on interest rate hikes this year. Spot gold was down 0.4 percent at $1,335.49 per ounce, as of 0710 GMT, after a 0.7 percent drop in the previous session. Earlier in the day, the bullion hit its lowest since January 23 at $1,334.10.
US gold futures were 0.5 percent lower at $1,335.20 per ounce. Gold prices gained 2.5 percent so far this month, largely due to a weak dollar. The greenback posted its sixth straight weekly drop last week, hitting a three-year low on Friday, and is on track for its biggest monthly decline since March 2016.
The Fed is widely expected to keep interest rates unchanged at its two-day policy meeting that starts later in the day. Investors, however, will be focusing on the central bank's assessment of the economy and inflation for hints on the monetary policy outlook. Gold prices have risen over 8 percent since the last Fed meeting in December.
The sudden repricing in global bond markets caught a consolidating gold market off guard, triggering profit-taking, said Stephen Innes, APAC trading head for OANDA. Spot gold may break a support at $1,335 per ounce and fall more towards the next support at $1,316, as suggested by its wave pattern and a Fibonacci retracement analysis, according to Reuters technical analyst Wang Tao.
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