Gold prices slipped on Tuesday while the U.S. dollar was also slightly weakened against the yen ahead of a monetary policy decision from the Bank of Japan.
Gold futures for August delivery on the Comex division of the New York Mercantile Exchange fell by $0.80, or 0.07%, to $1,220.50 a troy ounce by 1:30AM ET (05:30 GMT).
Meanwhile, the U.S. Dollar Index, which tracks the greenback against a basket of other currencies, fell 0.01% to 94.13 on Tuesday, off a one-year high of 95.656 touched on July 19.
The Bank of Japan is expected to trim its inflation forecasts later in the day and consider changes to its stimulus program, earlier reports suggested.
Dollar-denominated commodities such as gold are sensitive to moves in the dollar. A fall in the dollar makes the yellow metal cheaper for holders of foreign currency, raising demand.
Looking ahead, the U.S. Federal Reserve begins its two-day monetary policy meeting later on Tuesday. The central bank is largely expected to stand pat on monetary policy.
The U.S. central bank has raised benchmark lending rates twice this year and markets expected two more hikes by the end of 2018.
Higher U.S. rates tend to push the dollar higher, making greenback-denominated gold more expensive for holders of other currencies.