Gold is on track to post its worst quarter in 13 years, as war-induced inflation fears in recent weeks sent the metal into a downward spiral that saw it lose all of its gains in 2026.
Spot prices are trading at just over $4,000 an ounce, having fallen 15% over the past three months and 7.5% over the year. Earlier, it fell below this level – seen as a key support level – for the first time since early November.
The yellow metal is now heading towards its first quarterly decline since 2024, and its worst performance in three months since the June quarter of 2013.
Rollercoaster year
Bullion has had a rollercoaster ride this year, rising to a record high of nearly $5,600 an ounce. In January, it was followed by a widespread sell-off, the worst since the 1980s. The recovery attempt was halted by a multi-month decline, as the US-Iran conflict escalated into a regional war that sent energy prices soaring, raising expectations of a global interest rate hike and putting continued pressure on gold.
“There is pressure on gold because people are not seeing a lot of light at the end of the tunnel,” said Edward Meier, an analyst at Marks, referring to the conflict in the Middle East that has caused gold prices to fall 25% since late February.
As inflationary concerns persist, investors are closely watching the Fed’s next moves – whether rising price levels warrant a rate hike, which many expect in December and perhaps starting as early as September.
“Markets expect the Federal Reserve to keep interest rates high for a long period and may consider raising interest rates again,” Meir said, noting that these expectations affected gold prices.
Ole Hansen, head of commodity strategy at Saxo Bank, said there were “persistent concerns that the Fed may maintain a hawkish stance despite the sharp decline in energy prices.” BloombergWhile he added that some traders may have gained confidence from gold’s recovery from the lowest level it recorded last week.
“However, prices first need to cross the $4,100 level before it is reasonable to consider that a short-term bottom may have been reached,” he added.
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