Gold Heads for Worst Quarter Since 2013
- Gold posts worst quarter since 2013.
- Fed stance drives sharp bullion selloff.
- Strong dollar outweighs geopolitical safe-haven demand.
- Higher rates continue pressuring gold prices.
Gold is on track for its worst quarterly performance since 2013 as expectations of higher U.S. interest rates and a stronger dollar continue to outweigh the metal’s traditional appeal as a safe-haven asset.
Spot gold traded at $4,026.17 an ounce at the end of June, down 11.2% for the month – its biggest monthly decline since October 2008. The metal is also heading for its first quarterly loss since 2024 and its steepest since the second quarter of 2013, when the Federal Reserve’s “taper tantrum” triggered a broad selloff in precious metals.
Fed’s Hawkish Outlook Is Pressuring Gold
The main driver behind gold’s decline is the Federal Reserve’s shift away from interest-rate cuts. With policymakers signaling no rate cuts in 2026, investors have increasingly favored higher-yielding assets such as U.S. Treasuries over gold, which offers no income.
A stronger dollar has reinforced the trend. Higher U.S. interest rates typically boost the dollar, making gold more expensive for overseas buyers and reducing demand for the precious metal.
Analysts told Yahoo Finance that elevated inflation, higher rate expectations and dollar strength are collectively outweighing the factors that would normally support a rally in gold.
Why Middle East Tensions Haven’t Lifted Prices
Geopolitical conflicts usually increase demand for gold, but the latest tensions between the United States and Iran have had the opposite effect.
Higher crude oil prices have raised inflation expectations, strengthening the case for the Federal Reserve to keep interest rates elevated for longer. As a result, the inflationary impact of the conflict has become a bigger influence on gold prices than its traditional safe-haven appeal.
Spot gold briefly fell to $3,975.04 during June, slipping below the $4,000 level before recovering. U.S. gold futures also declined 1.7% during one of the month’s sharpest selloffs.
Goldman Sachs Still Sees Long-Term Upside
Despite the recent correction, Goldman Sachs continues to expect higher gold prices over the longer term. The bank lowered its year-end forecast to $4,900 per ounce from $5,400, reflecting expectations that the Fed will keep monetary policy tighter than previously anticipated.
The investment bank said central bank purchases and reserve diversification remain long-term supports for gold demand. It also noted that geopolitical uncertainty could eventually encourage investors and central banks to increase allocations to the metal once interest-rate expectations begin to ease.
For now, however, gold remains under pressure. Until investors become convinced that the Federal Reserve is ready to lower interest rates, analysts expect the metal to remain highly sensitive to inflation data, bond yields and movements in the U.S. dollar.
