Gold settled lower on Tuesday, backing away from the previous session's three-week highs as a stronger dollar and possible thawing of Middle East-West tensions quelled appetite for safe-haven assets.
A higher reading for consumer prices in the United States did not aid sentiment for gold as it did for the dollar, which rose on the view that the Federal Reserve was headed for more monetary tightening, traders said.
There was no rush to hedge in the precious metal either after weaker U.S. home construction numbers for May indicated a softer economy in general.
With less immediate concern over the situation in the Middle East, attention turned to the start of the Fed's two-day policy meeting, where it is expected to further taper U.S. bond purchases. The central bank will issue a statement on Wednesday on the outcome of the meeting.