Gold Set for Fourth Straight Monthly Decline

Gold weakened below $4,000 an ounce on Tuesday to its lowest levels in nearly eight months, and was on track for a fourth consecutive monthly decline amid Middle East uncertainties and expectations that the US Federal Reserve will raise interest rates this year. The precious metal has declined more than 12% this month and roughly 15% this quarter. Markets continue to price in three Federal Reserve rate hikes this year, with the first move potentially coming in September. Investors are now awaiting the latest US monthly employment report for fresh clues on the policy outlook. Meanwhile, US and Iran are scheduled to resume peace talks in Doha, Qatar later today, although prospects for a lasting ceasefire remain unclear. A major sticking point remains after Tehran reiterated its plan to oversee traffic through the Strait of Hormuz even if Oman decides not to take part.

Gold held above $4,000 an ounce on Tuesday after falling nearly 2% in the previous session, as investors looked ahead to the resumption of US-Iran peace talks in Doha that could help ease inflation concerns. Still, a key obstacle remains after Tehran reaffirmed its intention to oversee traffic through the Strait of Hormuz even if Oman chooses not to participate. Shipping through the strategic waterway slowed over the weekend following renewed clashes that left two vessels damaged, although tanker operators and their crews have shown a willingness to continue transiting the route. Still, gold remained under pressure as markets continued to price in multiple US Federal Reserve interest rate hikes this year, with the first potentially coming in September. The precious metal is on course to lose more than 11% this month and around 14% this quarter, marking its steepest quarterly decline on record.

Gold fell to $4,040 an ounce on Monday, as uncertainty over US-Iran peace talks stoked inflation concerns and reinforced expectations of Federal Reserve interest rate hikes. The precious metal is on track for a fourth straight monthly loss, with a decline of over 10% this month. The US and Iran agreed to halt hostilities in the Gulf and resume talks over the Strait of Hormuz. US President Donald Trump revealed Tehran sought a meeting with an American delegation in Qatar on June 30, following Iran’s missile and drone strikes on US military sites in Kuwait and Bahrain. Trump had earlier warned Iran of severe consequences if it failed to honor a peace agreement. Gold, typically an inflation hedge, loses appeal in high-rate environments as it yields no income. Markets now price in three Fed rate hikes this year, with a 60% chance of a September increase. Investors also await key US jobs data later this week.