2017.09.1801:10:00UTC+00Gold Prices Drop to 2-Week Low Prior to Fed Meeting

Gold prices fell to its weakest level in more than two weeks early on Monday amid a stronger dollar. The likelihood of monetary policy tightening in the United States prior to the Federal Reserve's two-day meeting beginning on Tuesday also added pressure on the precious metal.

Spot gold fell 0.2 percent at $1,316.50 per ounce, after slipping earlier to $1,315.10, its weakest level since Aug 31.

U.S. gold futures for December delivery dropped 0.4 percent to $1,310.60 per ounce.

The dollar strengthened on Monday in a cautious beginning to a week in which the U.S. Federal Reserve will likely tackle its balance sheet as part of a long reversal of super-cheap money worldwide.

"I think the market is increasingly focusing on the Federal Reserve and its probability of another rate hike this year," according to ANZ analyst Daniel Hynes.

The greenback was steady near a seven-week peak versus the Japanese yen on Monday, bolstered by recent increases in U.S. Treasury yields.

Sterling was also stable after rallying the previous week, driven by expectations that the Bank of England might hike interest rates soon.

Gold imports into India in August, the world's second largest gold consumer, were at it lowest so far in 2017.