Gold prices fell below $4,000 in early trading, continuing their decline as inflation concerns increased expectations that US interest rates will remain high for a longer period.
At 9.10 am, gold prices were trading at $3,960, down 1.39% since they opened early Tuesday in Asian trading.
At the same time, geopolitical factors continued to be the focus of the market. CNBC reported that the United States and Iran are scheduled to hold new talks in Doha, Qatar on Tuesday following weekend tensions in the Middle East.
However, uncertainty remains high as Iran has not issued any official statement.
Market sentiment was also influenced by the stance of the Federal Reserve (Fed) which is seen as still inclined to maintain tight monetary policy. Oil market news
Although the Fed maintained interest rates at its June meeting, policymakers still expect a rate hike by the end of the year due to inflation remaining above the 2% target.
The high interest rate environment is putting pressure on gold as the precious metal does not offer interest returns. This makes gold less attractive than fixed income assets.
Market attention is now shifting to US employment data, including the ADP report on Wednesday and the Non-Farm Payroll (NFP) report on Thursday.
If the jobs data is stronger than expected, it could reinforce the Fed's stance on keeping interest rates high for longer, putting pressure on gold prices.
Conversely, if the labor market shows signs of weakness, the US Dollar is likely to weaken and this could provide support to gold prices in the short term.
