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Gold edges lower ahead of Fed rate decision

Gold prices edged lower on Tuesday as the dollar strengthened ahead of a meeting of the Federal Reserve at which the U.S. central bank is expected to raise interest rates for the first time this year.

The looming Fed meeting has helped push gold down nearly 4 percent from a 1-1/2-year high in January.

Higher interest rates are negative for gold because they raise bond yields, reducing the appeal of non-yielding bullion, and tend to boost the dollar, making gold more expensive for users of other currencies.

Spot gold XAU= was down 0.3 percent at $1,312.97 an ounce at 1002 GMT, while the dollar .DXY USD/ was slightly stronger against a basket of major currencies.

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