Gold moved lower in Asian trading on Wednesday, with the metal finding little respite after a sharp quarterly sell-off. Spot gold was down 0.7% at $3,981.50 an ounce by 22:26 ET (02:26 GMT), while gold futures lost 1.1%, trading at $3,994.32/oz.
The yellow metal recorded a roughly 14% decline in the June quarter, the steepest quarterly fall since 2013. That downturn accelerated in June as investors reacted to mounting evidence of higher inflation and a more hawkish outlook from U.S. monetary policymakers.
Market attention has turned to an address by Federal Reserve Chair Kevin Warsh scheduled for later on Wednesday, with traders hoping for additional clarity on the path of U.S. interest rates. Sentiment has shifted toward the dollar as participants increasingly price in the likelihood of Fed rate hikes this year.
Drivers of recent weakness
- Bullion led losses among precious metals as investors moved into the dollar amid growing expectations that the Federal Reserve will raise interest rates this year.
- The Fed's June meeting highlighted a number of policymakers advocating for at least one interest-rate increase this year - a sharp change from earlier market assumptions that cuts might begin in 2026.
- Sticky inflation helped drive that shift in expectations. High oil prices related to the Middle East war were cited as one inflationary factor, though oil eased after a U.S.-Iran peace deal. Other inflation pressures included rising chip prices tied to heavy artificial intelligence demand and consumer price adjustments, such as Apple Inc raising prices on several devices in June.
Markets are pricing in at least one rate hike by the Federal Reserve this year, according to CME FedWatch data reflected in market behavior. Higher interest rates tend to make non-yielding assets like gold less attractive because they raise the opportunity cost of holding those assets.
Performance across precious metals
Other precious metals also posted declines on Wednesday and showed significant quarterly losses. Spot silver fell 1.3% to $57.7950/oz and finished the June quarter down about 22%. Spot platinum slipped 0.4% to $1,548.0/oz after a roughly 21% decline in the June quarter.
The combination of stronger dollar dynamics and rising expectations for tighter monetary policy has dominated market pricing, pressuring bullion and related metals while investors recalibrate holdings in light of evolving inflation and rate outlooks.
What markets will watch next
Traders will be watching the Fed chair's remarks for any additional clues on timing and magnitude of prospective rate moves. With policymakers signaling a willingness to entertain at least one hike this year, and with inflation forces described as persistent by market participants, central-bank guidance will likely continue to be a primary influence on precious-metal prices.