GOLD FALLS BELOW $4,000 AS QUARTERLY LOSSES MOUNT

Gold fell below $4,000 per troy ounce on Wednesday, trading at $3,978.50, continuing a sharp decline that has marked the precious metal's worst quarterly performance in over a decade. The price dropped to $3,942.90 on Tuesday, its lowest level since November, with losses of 14 per cent recorded in the second quarter. This represents the poorest three-month period for gold since 2013, a sharp reversal from January's near-record high of $5,595 per ounce.

The decline reflects cooling retail investor enthusiasm amid expectations that US interest rates will remain elevated. Speculation centres on forthcoming remarks by Federal Reserve chair Kevin Warsh, where analysts anticipate signals of potential rate rises. Gold, a non-yielding asset that generates no income, typically loses appeal when borrowing costs rise, as investors shift towards higher-yielding alternatives such as bonds and Treasury securities. According to Susannah Streeter, chief investment strategist at Wealth Club, recent robust US jobs data and persistent inflation have reinforced expectations that rates will remain higher for longer, pushing up Treasury yields and the dollar whilst reducing gold's attraction.

The two-year rally in gold began to falter following Middle East conflict, which drove oil prices upward and stoked inflation expectations. Many investors responded by reducing their positions and realising gains accumulated during the extended bull market. Higher interest rates and strengthened Treasury yields have continued to weigh on bullion demand as market participants reassess their asset allocation strategies.