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Gold fell to its lowest level in nearly 2.5 years on Friday as the US dollar strengthened amid rising geopolitical and economic risks.
The bullion traded at $1,663.45 an ounce as of 4:40pm (GMT +4), the lowest since early April 2020 and eroded gains made last month when prices peaked at more than $1,770 an ounce.
The precious metal has been showing its weakness since the first quarter of the year amid interest rate hike expectations.
According to analysts, investors have turned to the US greenback amid the energy crisis in Europe and rising interest rates. The US dollar is expected to strengthen further and peak in the first quarter of next year.
"Europe faces a serious energy crisis, which is a headwind for [the euro] and support for [the US dollar]... In the face of sustained dollar strength, we see gold continuing to underperform," said FXStreet in a note on Friday.
"Rising geopolitical and economic risks are doing little to entice safe-haven buying, with the USD still the asset of choice."
The US dollar rallied and headed for a 1% rise this week, while the euro dropped 0.5%, according to Reuters.
However, the trend could shift in favour of the yellow metal in the event of a stagflation scenario or recession.
"The risk of either stagflation or outright recession could ultimately turn this around. Gold has traditionally outperformed in such environments," the note said.
(Reporting by Cleofe Maceda; editing by Seban Scaria)
