Gold Records Largest Single-Day Drop in 12 Years Amid Trade Optimism, Dollar Strengthening

Gold prices experienced a significant pullback in late October 2025 after a historic rally that had pushed prices to record highs above $4,380 an ounce. The sharp declines, including a 6.3% drop marking the largest in over a decade, were driven by profit-taking, a stronger U.S. dollar, easing U.S.-China trade tensions, and technical indicators signaling overbought conditions. Despite the recent volatility and price corrections, gold remains up about 55-60% for the year, supported by ongoing geopolitical uncertainty, central bank purchases, and investor demand for safe-haven assets amid expectations of Federal Reserve interest rate cuts. The selloff also impacted silver and other precious metals, which experienced similar declines. Analysts maintain a bullish outlook on gold's longer-term prospects, with some forecasting prices could reach $6,000 an ounce by mid-2026, driven by structural demand and continued investor interest. Market participants are closely watching upcoming U.S. inflation data and Fed policy decisions, which are likely to influence gold's near-term trajectory.