Gold Extends Rout in Volatile Pullback From Record Price Surge - Yahoo Finance
Original story by: Yahoo Entertainment
Last updated: Oct 22, 2025
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- Context: Gold experienced a significant price drop, marking its worst rout in years, after a prolonged rally fueled by concerns over inflation, geopolitical uncertainty, and Federal Reserve policies. While the immediate decline was sharp, market analysts suggest that the underlying reasons for gold's strength remain, and a floor for prices is expected soon.
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- Detailed Summary:
- Gold saw a substantial decline, falling as much as 2.9% on Wednesday and 6.3% at one point on Tuesday, indicating a potential end to its record-breaking rally.
- Analysts suggest gold's previous price levels were "expensive," making some pullback understandable, though long-term bullish views persist.
- Key drivers for the recent gold rally included the "debasement trade" (investors seeking refuge from rising budget deficits) and expectations of Federal Reserve interest rate cuts.
- Despite the sharp retreat, gold remains up approximately 55% for the year.
- Fundamental factors supporting gold, such as low interest rates and government budget deficits, have not changed, leading some to believe a price floor will be found shortly.
- Retail investors have played an increasing role in gold's rally, with increased activity in gold-backed ETFs and futures.
- Geopolitical uncertainty, including trade tensions and central banks diversifying away from the US dollar, also underpinned the precious metal's rise.
- Citigroup downgraded its gold recommendation, citing concerns about stretched positioning and expecting consolidation around $4,000 an ounce.
- Potential progress in US-China trade talks was also cited as a factor weighing on gold's haven appeal.
- Other precious metals also experienced volatility, with silver plunging and platinum and palladium seeing gains.
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