Gold prices hovered near a seven-month low on Tuesday, putting the precious metal on course for its worst quarterly performance in more than a decade as a stronger US dollar and expectations of higher interest rates pressured demand.
Spot gold rose 0.2 percent to $4,022.29 per ounce by 0923 GMT, after earlier touching its lowest level since November 2025. US gold futures for August delivery slipped 0.1 percent to $4,036.50 per ounce.
The metal was down more than 11 percent for the month, extending its decline to a fourth consecutive monthly fall. Gold was also heading for its first quarterly loss since 2024 and its biggest quarterly percentage decline since the second quarter of 2013.
“The failure to sustain gains highlights the current fragile sentiment, where traders continue to sell into strength rather than buy into weakness,” said Ole Hansen, commodities strategist at Saxo Bank.
He said the shift marked a change from investor behaviour in recent years, when market participants had generally used price declines as opportunities to buy gold.
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Hansen said gold prices would need to rise above $4,100 per ounce before there could be stronger indications that a market bottom had been established.
The precious metal has faced pressure from a strengthening dollar, which was on track for a second straight monthly gain as markets increased expectations of higher US interest rates.
Gold is traditionally viewed as a hedge against inflation and economic uncertainty, but higher interest rates tend to weigh on the non-yielding asset by increasing the opportunity cost of holding bullion.
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Rising energy prices linked to conflict in the Middle East have also reduced expectations that the US Federal Reserve will cut interest rates this year. Markets were pricing in a 64 percent probability of a rate increase in September, according to CME FedWatch data.
Investors are now turning their attention to upcoming US labour market indicators, including the ADP employment report and nonfarm payrolls, for signals on the Federal Reserve’s future monetary policy direction.
The data will be closely watched for signs of whether the US economy remains strong enough to support further interest rate increases or whether slowing growth could encourage a shift in policy.
Meanwhile, other precious metals also remained under pressure. Spot silver rose 0.6 percent to $58.64 per ounce, while platinum gained 0.2 percent to $1,577.14 and palladium increased 1.04 percent to $1,266.
All three metals were also heading towards monthly and quarterly losses.
Oil prices were meanwhile on track for their worst quarter since early 2020 as traders assessed the possibility of renewed diplomatic engagement between the United States and Iran. Iran, however, rejected reports that talks were taking place in Doha this week.
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The broader commodity market has been shaped by shifting expectations around global economic growth, energy prices and central bank policies, with investors closely watching geopolitical developments and inflation trends.
For gold, analysts say the outlook will largely depend on the direction of US interest rates, the strength of the dollar and whether investors return to bullion as a safe-haven asset.
