Gold prices remained under pressure on Tuesday and were set to post their largest quarterly decline in more than a decade, as investors continued to price in persistent inflation and the possibility of additional U.S. interest rate increases.
Spot gold rose 0.1% to US$4,197.54 an ounce at 05:48 ET (09:48 GMT), while gold futures slipped 0.2% to US$4,033.05 an ounce. Bullion has fallen more than 11% during June, putting it on track for a fourth consecutive monthly decline.
Market watches for signs of a price floor
“The question for traders to ask now is whether the low is in for gold, given the five-month selloff from the all-time highs hit at the end of January, or has gold got further to fall?” said David Morrison, Senior Market Analyst at Trade Nation, in a note.
Inflation concerns support expectations of further tightening
Investors have become increasingly concerned that elevated energy costs and disruption linked to artificial intelligence investment could keep inflation higher for longer, reinforcing expectations that the Federal Reserve may raise interest rates again before the end of the year.
Such an environment typically reduces the appeal of assets that do not generate income, including gold.
Although oil prices have eased back to levels seen before the recent conflict following the interim agreement between the United States and Iran, geopolitical uncertainty remains. Pakistan said technical discussions between U.S. and Iranian representatives are expected to take place in Qatar later this week after renewed tensions over the weekend.
Dollar strength weighs on precious metals
A stronger U.S. dollar has added to the pressure on bullion as markets increasingly anticipate at least one more Federal Reserve rate increase in 2026.
Several Fed officials adopted a hawkish stance during the June policy meeting, suggesting that additional tightening could still be appropriate.
OCBC cuts gold and silver forecasts
OCBC analysts lowered their outlook for precious metals on Tuesday, citing higher interest rates and a less favourable macroeconomic environment.
The bank reduced its end-2026 gold forecast to US$4,360 per ounce from US$5,100, while lowering its silver forecast to US$67 per ounce from US$89.50.
Despite the revisions, analysts stressed that the changes reflect weaker short-term macroeconomic conditions rather than a deterioration in the longer-term outlook for precious metals.
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