Tuesday saw a slight decline in gold prices, continuing losses from the previous session as the dollar and Treasury yields rose on speculation about the Federal Reserve's upcoming decision and expectations for higher inflation readings this week.

Spot gold slumped a bit to $1,936.21 per ounce, while gold futures muted  at $1,970.55 per ounce.

Over the past week, positions in the dollar and bond markets have grown, with the dollar up in expectation of a consumer price index (CPI) reading on Thursday that is anticipated to show some symptoms of sticky inflation.

Little investor interest was seen in gold, which drifted lower as the outlook for non-yielding assets dimmed due to the possibility of further interest rate increases.

Different opinions about potential rate rises by the Fed have been expressed recently in Fed officials' comments. In order to push inflation closer to the Fed's annual goal range, more rate hikes will probably be required, according to Fed Governor Michelle Bowman on Monday.