Gold fell for a third session early on Tuesday as the dollar continued climb after the Federal Reserve last week warned interest rates may rise as inflation continues to run ahead of its 2% target.
Gold for August delivery was last seen down US$79.40 to US$4,123,30 per ounce.
The price of the metal has dropped 5.6% since the Federal Reserve's policy committee on Wednesday ended its two-day meeting leaving interest rates unchanged but warned of a potential rate hike as inflation surges due to the rising energy costs following the U.S.-Iran war, boosting the dollar.
"Traders and investors continue to adjust to the risk of higher funding costs amid the Fed's focus on inflation and price stability," Saxo Bank wrote.
The dollar rose to the highest since since March 2025. The ICE dollar index was last seen up 0.21 points to 101.23. Treasury yields fell, with the U.S. two-year note last seen down 3.9 basis points to 4.2%, while the 10-year note is paying 4.485%, down 3.1 points.