Read: Fed seen announcing start of a ‘taper’ of bond purchases this week

“If that is indeed the case, and the first step in a longer-term tightening strategy is about to occur, I’d say gold is pretty buoyant. I believe that the Fed’s initial move to taper will be a tentative baby step in light of the current risks to growth,” Grant said.

Gold for December delivery
GC00,
-0.43%

GCZ21,
-0.43%
declined by $6.40, or 0.4%, to settle at $1,789.40 an ounce on Comex after posting a gain of 0.7% Monday. December silver
SI00,
-2.36%

SIZ21,
-2.36%
fell 57 cents, or about 2.4%, to $23.507 an ounce.

With the Fed probably announcing a taper Wednesday and “maybe even laying the groundwork for rate hikes later next year, in keeping with hawkish shifts from central banks around the world in recent weeks and months,” gold may struggle, said Craig Erlam, senior market analyst at Oanda.

“A stronger dollar could pile further pressure on the yellow metal as it already appears to have entered into a corrective pattern,” he said in a market update. On Tuesday, the dollar, as measured by the ICE U.S. Dollar index
DXY,
+0.21%
was up 0.2%.

For now, gold bulls “remain trapped in a sticky region with the 200-day simple moving average and $1,800 acting as the first level of resistance,” said Lukman Otunuga, senior research analyst at FXTM, in a note.

“Beyond this point, prices may test the October high at $1,813.67, ahead of $1,833.84, the highest level hit in September. Ultimately, how gold ends the week will be impacted by the Federal Reserve meeting and U.S. jobs report on Friday,” he wrote.

Among other metals traded on Comex, December copper
HGZ21,
-0.51%
declined by 0.3% to $4.366 a pound.

January platinum
PLF22,
-2.45%
lost 2.6% to $1,039.30 an ounce and December palladium
PAZ21,
-2.01%
declined by 2.2% to $2,007.40 an ounce.