Gold futures dropped 1.24% in early Wednesday trading, extending a steep sell-off that saw the precious metal record its worst quarterly performance since 2013.
The decline marks a continuation of the pressure that defined the second quarter, which ended in June with significant losses for bullion.
The sell-off is being driven by a persistent hawkish stance from the Federal Reserve and renewed inflation concerns.
These macroeconomic headwinds are eroding demand for non-yielding assets as investors reassess the outlook for interest rates.
The shift in sentiment reflects a broader move away from safe-haven positioning toward assets that offer yield in a higher-for-longer rate environment.
Handelsavisen analysis indicates that the confluence of sticky inflation data and central bank rhetoric has created a difficult backdrop for gold.