Gold prices fell more than 2% on Tuesday, marking a significant retreat for the precious metal as market sentiment shifted against safe-haven assets.
The decline was driven by a strengthening US dollar and growing expectations that the Federal Reserve may implement interest rate hikes later this year, increasing the opportunity cost of holding non-yielding assets.
The sell-off in gold coincided with broader weakness across global equity markets, which also declined during the session.
Investors appear to be recalibrating their portfolios in response to the changing macroeconomic outlook, with the dollar's firmness acting as a primary headwind for commodities priced in US currency.
In addition to monetary policy concerns, market participants are closely assessing the progress of US-Iran peace talks.
While geopolitical tensions often support gold prices, the current diplomatic developments have introduced uncertainty, leading some traders to book profits.