Spot gold fell 0.8% to $3,974.01 per ounce on Wednesday, continuing a downward trajectory that has seen the precious metal trade near its lowest levels in seven months.
The decline follows a session on Tuesday where prices retreated under pressure from a strengthening US dollar and shifting market sentiment regarding the Federal Reserve's policy path.
The sell-off in gold is being driven by firmer US Treasury yields, which reduce the opportunity cost of holding non-yielding assets.
Market participants are increasingly pricing in the possibility that the Federal Reserve may raise interest rates later this year, a development that typically weighs heavily on gold prices.
This repricing reflects a broader shift in macro expectations, with investors adjusting positions in response to a more hawkish outlook.
The pressure on gold is part of a wider market move characterized by a stronger US dollar and rising bond yields.