• Spot gold reversed earlier gains, falling 0.5% to $4,304.19 per ounce, as the U.S. dollar strengthened amid shifting rate expectations.
  • The pullback reflects a tug-of-war between safe-haven demand and dollar pressure, with geopolitical risks providing support but real yields weighing.
  • Analysts expect continued volatility in the near term, with gold range-bound around key psychological levels.

Gold prices slipped into negative territory Tuesday, declining 0.5% to $4,304.19 per ounce, as a firmer U.S. dollar and rising real yields prompted profit-taking after recent gains. The move came despite ongoing geopolitical tensions that have underpinned safe-haven demand for bullion.

"The dollar index has pushed higher on expectations that the Federal Reserve will maintain a cautious stance," said a senior precious metals strategist at a European bank. "That's creating headwinds for gold in the short term."

Market participants noted that the metal has struggled to sustain rallies above the $4,350 level, with each attempt met by selling pressure. "We're seeing a pattern of buyers stepping in on dips, but sellers emerge on strength," said a trader at a New York-based bullion bank. "It's a very range-bound market right now."

Traders are closely watching upcoming U.S. economic data, including inflation readings and jobless claims, for clues on the Fed's next move. Higher interest rates increase the opportunity cost of holding non-yielding gold.

Central bank buying continues to provide a floor under prices, with recent reports showing increased purchases by emerging-market central banks in May. However, this demand has been insufficient to drive a breakout amid dollar strength.

"Geopolitical risks remain elevated, which supports gold's safe-haven appeal, but the macro environment—namely a strong dollar and sticky inflation—is limiting upside," the strategist added.

Looking ahead, analysts expect the metal to remain volatile, with support around $4,250 and resistance near $4,400. A break above that range would require a significant shift in monetary policy expectations or an escalation in geopolitical risks.

Correction: An earlier version of this article misstated the level at which gold turned negative. It was $4,304.19, not $4,305.50.