Gold futures settled Tuesday with a modest decline as investors turned their attention to a rally in the U.S. stock market ahead of the Federal Reserve’s monetary-policy meeting next week.

The meeting may determine the direction of the dollar and dollar-denominated commodities like gold.

Demand from Asian buyers helped keep a cap on any losses for gold with recent data showing that China bought 16 tons of the yellow metal in August, after purchasing 19 tons in July. The U.S. dollar also weakened a bit Tuesday, giving dollar-denominated gold prices some added support.

Still, gold for December delivery edged down by 40 cents to settle at $1,121 an ounce on Comex, after trading between a low of $1,114.70 and a high of $1,126.

On Monday, there was no settlement for Comex gold because of the Labor Day holiday. Prices ended last week with a loss of more than 1%, pressured by expectations that the Fed may raise interest rates for the first time since 2006. The central bank’s next two-day monetary-policy meeting begins on Sept. 16.

A rate increase would be a boon for the dollar but commodities like gold, which is sold in dollars, would be more expensive to buyers in other currencies.

In other metals, December silver rose 20.6 cents, or 1.4%, to $14.755 an ounce. High-grade December copper settled up 12.2 cents, or 5.3%, at $2.434 a pound, rebounding after last week’s decline of around 1.5%.

Source: MarketWatch