Spot gold retreated on Tuesday, falling 0.7% to trade at $4,045.29 per ounce.
The decline was driven by a strengthening U.S. dollar and shifting market sentiment ahead of the Federal Reserve's upcoming policy decision.
The strengthening dollar, a key inverse driver for gold prices, has added further pressure to the commodity.
Investors are increasingly pricing in the possibility of interest rate hikes later this year, a development that typically weighs on non-yielding assets like gold.
The precious metal's pullback reflects broader macroeconomic positioning as traders await the conclusion of the Fed's two-day meeting.
With the central bank's rate decision scheduled for Wednesday, market participants are closely monitoring economic data and official commentary for clues on the future path of monetary policy.
The strengthening dollar, a key inverse driver for gold prices, has added further pressure to the commodity.