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Gold Slips On Dollar Strength

Gold prices fell on Tuesday, emerging market currencies declined, and the U.S. dollar strengthened as investors braced for another big interest rate increase this week from the Federal Reserve.

Spot gold dipped half a percent to $1,667.76 per ounce, while U.S. gold futures were down 0.2 percent at $1,675.75.

Markets are fully pricing in a 75-basis point rise in rates when the Fed concludes its two-day policy meeting on Wednesday. Fed funds futures also show a slight chance of a full-point move.

Earlier today, Sweden's central bank raised its benchmark rate at a sharper-than-expected pace, citing high inflation.

The Executive Board of Riksbank raised the key interest rate by 1 percentage point to 1.75 percent while markets had widely expected a 75 basis-point rate hike.

The board said the monetary policy needs to be tightened more to bring inflation back to the target. The forecast indicated that the policy rate will be raised further in the coming six months.

In economic releases, Canada inflation data and U.S. building permits and housing starts, all for August, will be released in the New York session.

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