Gold prices slipped on Wednesday morning trade in Asia ahead of a meeting of the U.S. Federal Reserve and as investors look for clues on future interest rate hikes this year.

Gold futures for August delivery on the Comex division of the New York Mercantile Exchange were down $1.10 or 0.08%, to $1,298.30 a troy ounce by 1:15PM ET (05:15 GMT). 

Investors are now looking towards a two-day meeting of the Federal Open Market Committee (FOMC) that starts Wednesday for cues.

The Fed is widely expected to raise interest rates for the second time this year and markets are waiting to see if there will be a third and a fourth hike in 2018. 

Gold is highly sensitive to U.S. interest rates, which lift the opportunity cost of holding non-yielding bullion and boost the dollar, in which it is priced.

Meanwhile, the dollar stayed strong as the greenback continued along the upward trajectory that started Tuesday. The U.S. dollar index, designed to track the greenback against a basket of six major currencies, rose 0.06% to 93.

On Tuesday, demand for gold dropped and investors sought out the US dollar and riskier assets after an upbeat conclusion to a historic meeting between U.S. President Donald Trump and North Korean leader Kim Jong Un. The two leaders signed a document that said the U.S. President would provide “security guarantees” to Kim in exchange for the North Korean leader’s “unwavering commitment to complete denuclearization of the Korean peninsula.”

Dollar-denominated assets such as gold are sensitive to moves in the dollar – a gain in the dollar makes gold more expensive for holders of foreign currency and thus decreases demand for the precious metal.