FX.co ★ Gold Futures Pare Early Gains, Settle Moderately Lower

Gold futures settled lower on Monday, falling after two successive days of gains, as traders looked ahead to the Federal Reserve's monetary policy announcement, due on Wednesday.

The Fed is widely expected to raise interest rates by another 75 basis points to 2.5%. CME Group's FedWatch tool is currently indicating a 77.5% chance of a 75 basis point interest rate hike and a 22.5% chance of a 100 basis point rate hike. The dollar's weakness helped limit gold's downside. The dollar index drifted down to 106.19 in the European session, but recovered to 106.55 subsequently. The index had closed at 106.73 on Friday.

Gold futures for August ended lower by $8.30 or about 0.5% at $1,719.10 an ounce, coming off the day's high of $1,734.60.

Silver futures for September ended down by $0.289 at $18.328 an ounce, while Copper futures for September settled at $3.3545 per pound, gaining $0.0050.