Gold prices tumbled as much as 4% Tuesday, marking their steepest one-day decline since January as the US dollar surged to a three-month high. The sell-off wiped out gains from recent Middle East tensions, with bullion hitting its lowest level since February. A stronger dollar typically makes gold more expensive for foreign buyers and reduces its appeal as an investment.

Analysts point to multiple pressures driving the precious metal lower. The dollar index neared a three-month high, with experts warning such spikes can be "highly disruptive" to markets. Rising Treasury yields, fueled by foreign central banks selling US debt to defend their currencies, also diminished gold's attractiveness. Market volatility spread across asset classes, with major US indices falling sharply.

The broader precious metals complex suffered alongside gold, with silver dropping 8%, platinum falling 10%, and palladium off 7%. While geopolitical tensions had temporarily boosted gold's "risk premium" by as much as 10%, analysts note such gains often prove unsustainable when equity markets decline and traders face margin calls.