Gold prices edged lower on 27 October as the US dollar held near a one-week high, with investors awaiting the Federal Reserve's next interest-rate decision.
Spot gold fell 0.2% to $4,007.29 an ounce by 03:21 GMT, while US gold futures for December delivery declined 0.5% to $4,019.70, according to market figures reported by Asharq Al-Awsat.
The dollar's strength added pressure to bullion, making gold more expensive for buyers using other currencies. Investors were also assessing whether persistent inflation could prompt the US central bank to maintain higher borrowing costs.
Ilya Spivak, head of global macro at Tastylive, said gold was trading within the range established on Friday after a sharp decline the previous week.
Spivak identified $3,900 an ounce as an important downside level. A break below that price could expose gold to further losses towards $3,800, he said.
Gold had fallen 4% over the previous week, its largest weekly decline in approximately four months, as higher energy prices increased concerns about inflation and the outlook for US interest rates.
The precious metal had also traded below $4,000 during that decline, a level that investors were watching again as prices moved close to the threshold.
The Federal Reserve's policy announcement, scheduled for 28 October, is the next major event for financial markets.
Although policymakers had indicated that they did not expect to raise short-term borrowing costs at this meeting, investors remained concerned that inflation could limit the central bank's ability to keep rates unchanged.
According to the CME Group's FedWatch tool, the market probabilities cited in the report placed the chance of a rate increase at approximately 11% for the October meeting and 82% for December.
Those probabilities reflect market pricing rather than decisions already taken by the Federal Reserve, and can change as economic data and expectations shift.
Investors are also awaiting the US personal consumption expenditures price index, scheduled for release on 29 October.
The index is a key measure of inflation used by the Federal Reserve when assessing progress towards its 2% inflation target. A stronger-than-expected reading could reinforce expectations of tighter monetary policy.
Interest rates are particularly important for gold because the metal does not pay interest or dividends. Higher yields on other assets can make holding bullion comparatively less attractive.
Gold is also widely used by investors as a store of value during periods of inflation and economic uncertainty. Those characteristics can support demand even when monetary policy expectations weigh on prices.
Other precious metals also declined in early trading on 27 October.
Spot silver dropped 0.7% to $53.53 an ounce, while platinum lost 0.8% to $1,514.16. Palladium recorded a larger percentage decline, falling 1.5% to $1,034.75 an ounce.
The next scheduled indicators for investors are the Federal Reserve's policy decision on 28 October and the US inflation figures on 29 October.
