The prices of gold fell slightly on Monday ahead of a key announcement by the Federal Reserve on Wednesday on concerns over stimulus plans.

Gold for August delivery fell $3.90 to $1,383.70 an ounce at the COMEX division of the CME. The prices had touched a high of $1,391.40 and a low as $1,379.80 an ounce, while the spot price was trading at $6.21. The prices of gold have fallen 17 per cent this year after facing a drop in April as investors found alternative investment.

The Federal Reserve will soon release an updated statement on the federal fund rates as well as its monetary stimulus measures. The Federal Reserve will also latest economic forecasts for the economy, which is keenly watched by the investors. Chairman Ben Bernanke will also hold a press conference to discuss the issues after the announcements.

Some investors invest in gold as a hedge against inflation and the US central bank believes that the inflation in the country in under control. Experts say this would discourage investors from buying more gold and the bullion's status as a safe bet during crisis has also diminished.