Gold is heading for its steepest quarterly decline since 2013 as expectations of further US Federal Reserve rate hikes and a stronger dollar outweigh earlier safe-haven demand linked to geopolitical tensions.
Spot gold rose 0.2% to US$4,026.17 per ounce on Tuesday but remains down 11.2% in June, putting it on track for a fourth straight monthly loss. US gold futures for August delivery were steady at US$4,040.60.
The metal is also set for its first quarterly decline since 2024 and its biggest since the June quarter of 2013, as energy shocks from the Iran conflict earlier in the period fuelled inflation concerns before being overtaken by aggressive Fed tightening expectations.
Analysts said the combination of high inflation, strong rate hike expectations and a resilient US dollar has dominated market direction. Marex analyst Edward Meir noted that these factors are now overriding traditional bullish drivers for gold, which typically benefits from inflation hedging flows.
Markets are currently pricing in three Fed rate hikes this year with a roughly 64% probability of a September move, according to CME FedWatch data. Investors are now focused on upcoming US ADP employment and non-farm payrolls data for further signals on monetary policy direction.
RHB Investment Bank Bhd said COMEX gold has entered a renewed bearish phase after failing to sustain levels above US$4,100, with price action showing strong profit-taking pressure. The research house highlighted that the metal is retesting the key US$4,000 psychological support, and a break below could open the way towards US$3,700, with downside momentum reinforced by declining 20-day and 50-day moving averages.
OCBC’s precious metals strategist Christopher Wong said gold needs either lower real yields, a weaker US dollar or a clearer shift away from hawkish Fed expectations to stabilise. Without that, he added, rallies are likely to fade with prices consolidating below previous highs.
Other precious metals were mixed in early trade, with silver, platinum and palladium posting modest gains on the day but still tracking monthly and quarterly losses.
