Spot gold slid below the $4,000-per-ounce mark on Wednesday, touching $3,942.99 at one point—its lowest level since November—after losing 2% over the previous two sessions. The decline caps a 14% drop in the second quarter, the worst quarterly performance since 2013, and leaves the metal down 7% year-to-date from the all-time high of $5,405 reached in late January.

The sell-off has been propelled by a sharp rise in US Treasury yields and a strengthening dollar, as markets reprice the Federal Reserve’s interest-rate trajectory. Cleveland Fed President Beth Hammack stated on Tuesday that she saw scant evidence that current rates were restraining the economy and that further increases might be needed to bring inflation back to the 2% target. Traders now assign a 67% probability to a rate hike in September, according to the CME FedWatch Tool. At the same time, the fading prospect of a permanent US-Iran peace accord has kept inflation fears alive, while the conflict itself has squeezed liquidity in the Gulf and India—traditional gold-buying regions—prompting governments there to curb imports and preserve foreign-exchange reserves.

The World Gold Council’s mid-year outlook, published on 1 July, highlights a structural shift in demand. The bulk of gold’s price action now occurs during Asian trading hours, with investors in China, India, and Japan driving rebounds, while pullbacks tend to materialise when US markets are open. ETF inflows in those Asian markets are being fuelled by geopolitical risk, local currency weakness, and a search for alternatives to the dollar. Central banks, notably China’s, continue to add to their reserves. The Council’s analysts project that if the consensus holds—one Fed hike by October, parallel tightening from the Bank of England, the Bank of Japan, and the European Central Bank, and US inflation peaking near 3.9%—gold could trade within a 5% band around $4,100/oz through year-end. A sustained break below $4,000, however, could trigger further technical selling, though a decline of more than 10% from current levels would historically attract long-term buyers.

The immediate focus now shifts to US labour-market data. The ADP employment report due later on Wednesday and the nonfarm payrolls figures on Thursday will be parsed for clues on the economy’s resilience. Strong numbers would reinforce the case for tighter policy and could extend gold’s slide, while any sign of softening might relieve pressure on the non-yielding metal.