Gold futures ended lower Thursday, bucking a trend that has seen the precious metal record modest back-to-back gains, as investors grew more wary ahead of the U.S. Federal Reserve's meeting next week.
February gold shed $4.50, or 0.4%, to settle at $1,072 an ounce. Prices edged higher over the past two trading sessions. So far this month, the metal has now seen an equal number of up days as down days.
The gold often trades opposite the direction the dollar, as a strong dollar raises the cost of buying the metal for investors using other currencies.
Market participants say gold prices had been lifted in recent sessions by recent weakness in the dollar compared with the euro % The euro climbed after European Central Bank President Mario Draghi disappointed markets last Thursday when he failed to deliver a more expansive stimulus package than the market was expecting.
Still, expectations that the Fed will decide to hike interest rates at the conclusion of its meeting this Wednesday has been growing, keeping sentiment on gold mainly bearish.
Higher interest rates increase the cost of storing commodities, and make them less attractive for investors seeking better returns across assets. Higher rates can also boost the dollar, which would make dollar-denominated gold even less attractive.
On Thursday, the ICE U.S. Dollar Index headed higher, weighing gold prices, but it's still down about 0.3% for the week so far.
Meanwhile, March silver lost 7.9 cents, or 0.6%, to finish at $14.11 an ounce. March copper tacked on less than a penny to $2.073 a pound. January platinum shed $9.90, or 1.1%, to $855.90 an ounce and March palladium fell $10.10, or 1.8%, to $542.25 an ounce.