Gold falls as dollar rises ahead of Fed's meeting

Gold prices fell on Tuesday, to head for the first daily loss in 4 days, as the US dollar rose against its rivals, ahead of the Federal Reserve's first monetary policy meeting in 2021.

Gold prices fell 0.4% to $1,848.44 an ounce, after opening at $1,856.06 and hitting a low of $1,861.76.

The yellow metal gained 0.1% yesterday, and posted its first daily gain in 3 days on safe-haven demand.

The US dollar index rose over 0.25% against a basket of major currencies today, which weighs down on the prices of gold and other dollar-denominated metals.

The US dollar is shining as the best alternative investment, due to renewed concerns about the global economy and rising coronavirus infections in most parts of the world, in addition to doubts about the US stimulus package, despite the Democratic Party's control over the Congress in both the House of Representatives and the Senate.

The Federal Reserve will start its meeting later today, to discuss the latest developments of the US economy, and its decisions will be unveiled on Wednesday, amid broad expectation to keep the interest rates unchanged at 0.25%.

The first Fed meeting in 2021 is expected to provide key insight on the future of the US monetary policy, with President Biden's new approach in mind.

Gold stocks at the SPDR ETF remained unchanged yesterday, with the total at the lowest level since January 14 at 1,173.25 metric tonnes.