2018.05.0101:05:00UTC+00Gold Prices Drop as Dollar Strengthens Ahead of U.S. Fed Meeting

Gold prices dropped for the second consecutive session on Tuesday as the dollar strengthened near 3-½-month highs, with investors awaiting direction on U.S. monetary policy from the U.S. Federal Reserve.

Spot gold was down 0.2 percent to $1,312.11 per ounce. Prices notched $1,310.11 on Monday, their lowest since March 21.

U.S. gold futures for June delivery eased 0.5 percent to $1,313.10 per ounce.

The dollar index was steady at 91.848 as investors awaited the Fed's policy decision and key employment data due this week for fresh clues on the strength of the U.S. economy.

While the U.S. central bank is widely expected to stand pat on policy, market participants will be closely watching the two-day meet concluding on Wednesday for hints of an interest rate hike in June.

Most markets in Asia are closed for a Labour Day holiday.

Sales of U.S. Mint American Eagle gold coins fell to their weakest April since 2007, while silver coin purchases for the month increased 10 percent than last year, U.S. government

data showed.

India raised gold holdings by 2.2 tonnes to 560.3 tonnes in 2018 March, according to IMF data.

Among other precious metals spot silver lost 0.1 percent at $16.29 per ounce. Prices hit their lowest in about a month, at $16.18, in the previous session.

Platinum fell 0.2 percent to $901.00 per ounce. Prices reached $898.10 on Monday, its lowest since Dec. 18, 2017. Palladium dropped 0.3 percent to $962.20 per ounce.