Investing.com - Gold prices were little changed below the $1,100-level on Tuesday, as investors stuck on the sidelines ahead of the Federal Reserve's two-day monetary policy meeting due to begin later in the day.
Gold futures for December delivery on the Comex division of the New York Mercantile Exchange dipped $1.20, or 0.11%, to trade at $1,095.70 a troy ounce during European morning hours.
A day earlier, gold tacked on $10.90, or 1.0%, to close at $1,096.90 as steep declines on Chinese stock markets boosted demand for safe haven assets.
Also on the Comex, silver futures for September delivery shed 1.5 cents, or 0.1%, to trade at $14.59 a troy ounce.
Investors were looking ahead to the Fed’s monetary policy statement on Wednesday for any fresh indications on when it may start to hike interest rates.
Gold has been under heavy selling pressure in recent months amid speculation the Federal Reserve will raise interest rates for the first time in nine years as soon as September.
Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.22% to 96.84 early on Tuesday, moving off Monday's lows of 96.36.
Elsewhere in metals trading, copper for September delivery inched up 0.8 cents, or 0.35%, to trade at $2.362 a pound during morning hours in London. On Monday, copper tumbled to $2.336, a level not seen since June 2009.
The Shanghai Composite took investors on a roller coaster ride on Tuesday, plunging nearly 5% after the open, only to rebound into positive territory ahead of the midday break and then ease slightly again.
The People's Bank of China said in a statement before the market opened Tuesday it would act to stabilize market expectations. It also injected CNY50 billion into the market via seven-day reverse repurchase agreements and kept their rate unchanged at 2.50%.
On Monday, the Shanghai Composite tumbled 8.5%, the biggest one-day drop since February 2007, amid reports that government buying of stocks and securities has slowed.
Equity markets in China plunged sharply earlier this month, forcing policymakers to intervene and provide measures to boost liquidity and calm investors.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
Meanwhile, formal talks between Greece and its international creditors on a new bailout package are underway.
A new agreement must be reached before August 20 when Greece must repay more than €3 billion to the European Central Bank.