Gold prices edged into positive territory on Wednesday, reversing morning losses, after the precious metal closed its worst quarter in 13 years in three months to the end of June. 

The yellow metal began the second half of 2026 on the backfoot, before rebounding in early afternoon trade. Gold Futures were last seen hovering just above the flatline, at $4041.30, while spot prices were 0.49% higher at $4,025.89.

Having spiked at an all-time high of $5,586.20 on Jan. 29, bullion has since plunged as investors turn negative on the non-yielding asset's prospects in a potentially higher rate environment.

About 16% was wiped off gold in the three-month period ended June 30 — its worst quarter since the second quarter of 2013. Gold has fallen 7.76% year-to-date.

Giovanni Staunovo, commodity analyst at UBS, said gold's traditional safe-haven appeal has been offset lately by stronger-than-expected U.S. economic data, higher real yields, a firmer dollar and less dovish market view on the Federal Reserve's rates path.

"The move in prices mirrors the spike-and-consolidation pattern seen in past geopolitical crises, though gold also entered this period with elevated valuations and dovish Fed expectations as tailwinds, making it more sensitive now to macro drivers," Staunovo told CNBC via email.

Despite the slide, gold still has a key role to play in investors' portfolios as traditional correlations break down, according to Amundi Investment Institute.

In its mid-year Global Investment Outlook, Amundi said the more challenging monetary policy backdrop — coupled with high public debt trajectories and central banks' diversification away from dollar-based assets — should help support demand for gold and precious metals in the second half.

"Investors face a world in which the independence of central banks is being tested, inflation is more volatile, and concentration risks are growing," said Monica Defend, head of Amundi Investment Institute.

"The best portfolios for this new regime can withstand different scenarios: they need to be diversified across currencies, invested in real assets and gold, and explore equity sectors and structural themes with discipline."

The World Gold Council's recent annual Central Bank Gold Reserves survey found that more global central banks are poised to increase their gold reserves over the next year.

Staunovo said: "We think central bank gold demand, continued diversification away from the US dollar, and global debt concerns will remain important structural supports. While the near-term backdrop looks skewed toward consolidation, positioning does not appear stretched, and we remain constructive over the next 12 months."