Gold heads for worst quarter in 13 years on strong dollar, Fed hike bets

Key Points:

• Gold prices edged up 0.4% to $4,031.29 per ounce but remained near a seven-month low, heading for their worst quarterly performance since Q2 2013 due to a strong dollar amid expectations of U.S. interest rate hikes.
• The precious metal is down over 11% for the month, marking its fourth consecutive monthly decline and the first quarterly loss since 2024, with analysts noting fragile market sentiment and ongoing selling pressure.
• A stronger dollar and higher U.S. interest rate expectations, fueled by rising energy prices and geopolitical tensions in the Middle East, continue to weigh on gold, which is sensitive to rate hikes despite being an inflation hedge.
• Market focus is shifting to upcoming U.S. employment data for indications on the Federal Reserve's future monetary policy, while oil prices face pressure amid speculation of renewed U.S.-Iran diplomacy.
• Other precious metals like silver, platinum, and palladium also saw gains but are on track for quarterly and monthly losses, as central banks plan to reduce dollar holdings due to growing political risks around the U.S. currency.