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According to a Reuters report published on June 30, gold prices fell more than 1 percent on Tuesday and were set for their biggest monthly drop since late 2008 as uncertainty in the Middle East gave way to bets on U.S. rate hikes. Spot gold declined 1.5 percent to $3,956.92 per ounce by 0221 GMT while U.S. gold futures for August delivery lost 1.7 percent to $3,969.30. The metal has shed 12.7 percent so far in the month, marking its fourth straight monthly fall and putting it on track for its first quarterly decline since 2024. Bullion is also headed for the largest quarterly drop since the June quarter of 2013.
The slide stems from the Iran conflict that sent energy prices higher and stoked inflation fears, prompting traders to price in tighter monetary policy from the Federal Reserve, the report stated. Edward Meir, an analyst at Marex, said, “You have high inflation, high interest rate expectations, and a strong dollar, and that’s overriding all other bullish factors that are typically associated with a gold rally.” While gold is traditionally seen as a hedge against inflation, it loses appeal in a high-interest-rate environment, Meir explained in the dispatch.
Traders expect three Federal Reserve rate hikes this year and are pricing in about a 64 percent chance of a September increase according to the CME FedWatch Tool. Investors are now awaiting the June ADP employment and nonfarm payroll data due this week to further gauge the central bank’s stance. The U.S. dollar was headed for a second monthly gain, making bullion more expensive for holders of other currencies, Reuters figures showed.
Oil prices were on track for their sharpest quarterly decline since 2020 as investors eyed the outcome of Iranian and U.S. talks in Doha this week even as Iran said no meeting had been scheduled. Spot silver fell 2 percent to $57.13 per ounce in tandem with the move. Platinum lost 1.1 percent to $1,557.21 and palladium slid 0.4 percent to $1,208.17 with all three metals headed for quarterly and monthly losses, the report added.
Meir sees gold trading in the $3,500 to $4,400 range in the second half of the year according to his comments in the Reuters article. The performance caps a period where initial support from geopolitical tensions faded under macroeconomic pressures from rising rates and a firmer dollar. Separate market updates tracked by Reuters earlier in the week showed the monthly decline extending gold’s longest weekly losing streak since August 2023.
The report was filed by Pablo Sinha in Bengaluru with additional reporting by Swati Verma and editing by Subhranshu Sahu. It underscores how commodity markets have repriced risks rapidly in recent sessions as inflation data influenced rate expectations. Gold’s sensitivity to these shifts has been evident throughout the month as bullish factors gave way to the dominant influence of U.S. policy signals.
