Spot gold prices declined 1.5% to $3,957.74 per ounce, putting the precious metal on track for a fourth consecutive monthly decline.
The sell-off reflects growing market conviction that the Federal Reserve may need to raise interest rates, a development that typically pressures non-yielding assets like gold.
The downward pressure on gold is being amplified by a strengthening US dollar, which makes the metal more expensive for holders of other currencies.
Investors are also showing renewed caution regarding the durability of the US-Iran peace agreement, reducing the geopolitical premium that has previously supported safe-haven flows.
This combination of macroeconomic and geopolitical factors has eroded buying interest over the past week.
Gold prices have extended their decline for a third consecutive session, hovering near the lowest levels seen in more than seven months.