A stronger US dollar drags gold prices down as the market focuses on signals from the Federal Reserve meeting

1. During Tuesday's Asian trading session, spot gold prices edged lower, once dropping 0.86% to $4,041.48 per ounce, primarily pressured by a firm US dollar. Investors are closely watching this week's Federal Reserve policy meeting for further guidance on interest rate prospects.2. US President Trump stated on Monday that the US and Iran are engaging in “good dialogue” and may reach an agreement on the conflict, but also warned that if negotiations fail, the US will resume airstrikes. However, Tehran appeared to quickly test the US bottom line for pausing military action—Saudi Arabia, Jordan, and Iraq all reported drone attacks on Monday, leaving the geopolitical situation fragile.3. The US Dollar Index remains near a one-month high as markets weigh the possibility of a rate hike at this week's Federal Reserve meeting. Although the Fed is widely expected to keep rates unchanged when it announces its decision on Wednesday, CME FedWatch data shows that the probability of at least a 25 basis point hike has risen to 37%, up from 16% a week ago; the likelihood of a rate hike at the September meeting is as high as 81%.4. On Monday, Trump once again called on the Federal Reserve to lower interest rates, arguing that the US should have the lowest borrowing costs in the world. In addition, data released by the Hong Kong Census and Statistics Department showed that net gold imports into China via Hong Kong in June more than doubled compared to the previous month, but still declined by more than 5% compared to May.