Gold Prices Retreat After Record Run: Nine-Week Rally Comes to a Pause

Gold prices are set to end their nine-week winning streak as investors take profits and the market cools after a record-breaking rally. Analysts say technical correction, ETF outflows, and easing geopolitical risks are key drivers behind the pullback.

Gold Rally Loses Momentum After Reaching Record High

After a stunning rally that sent gold prices to an all-time high of $4,381.52 per ounce earlier this week, the precious metal is now cooling off. As of Thursday (October 23, 2025), spot gold was trading around $4,140/oz, heading for a 3% weekly decline—its steepest drop since May, according to Bloomberg.

The correction comes as investors reassess the strength of a nine-week winning streak that pushed gold into overbought territory. A surge in profit-taking, combined with a large outflow from gold-backed exchange-traded funds (ETFs), has weighed on sentiment. Bloomberg data showed that on Wednesday, gold ETFs recorded their largest single-day outflow in five months, signaling a shift in short-term positioning.

“The correction looks to be stabilizing, but broader retail participation means volatility will likely remain elevated,” said Charu Chanana, strategist at Saxo Capital Markets.

Why Gold Is Correcting — And What’s Behind the Selloff

1. Profit-Taking After a Strong Run

The rally that began in mid-August was driven by strong safe-haven demand amid global uncertainty. However, with prices hitting record highs and indicators flashing “overbought,” traders have started locking in profits.

2. Cooling Geopolitical Tensions

Investor optimism over potentially improved U.S.–China relations has eased demand for defensive assets. President Donald Trump and Chinese counterpart Xi Jinping are expected to meet next week to discuss ways to deescalate trade tensions — a development that could reduce geopolitical risk and weaken gold’s appeal.

3. ETF Outflows and Technical Adjustment

The recent selloff has been amplified by outflows from gold ETFs. Analysts note that many short-term investors, especially retail participants, entered the market late in the rally. As those positions unwind, gold’s momentum has naturally cooled.

4. Dollar and Yield Dynamics

A modest rebound in the U.S. dollar and expectations that the Federal Reserve will remain cautious before cutting interest rates further have also capped gold’s upside. While bullion remains supported by long-term fundamentals, its near-term path depends heavily on macroeconomic data, especially inflation and rate expectations.

Technical Picture: Key Levels and Market Signals

Gold’s technical charts suggest a market in consolidation. After reaching historic highs, prices have retraced to stabilize above the $4,100 level.

Immediate resistance: $4,148/oz

Major resistance: $4,236/oz (a confirmed break above this could restore bullish momentum)

Support zone: $4,000–$4,050/oz

A decisive drop below the $4,000 level could trigger a deeper correction, though analysts say that underlying demand from central banks and institutional investors remains a strong backstop.

“The next few weeks will test whether this pullback is merely a pause or a sign of exhaustion,” said a commodities strategist at ANZ Research. “We see consolidation as healthy after such an aggressive rally.”

Gold Still Up Over 50% in 2025

Despite the recent pullback, gold remains one of 2025’s top-performing assets, gaining more than 57% year-to-date. The rally has been fueled by:

Central bank buying: Many emerging markets have continued diversifying reserves into gold to reduce dollar dependency.

The “debasement trade”: Investors have turned to hard assets to hedge against growing budget deficits and currency depreciation.

Rate cut expectations: Markets are still pricing in two quarter-point Fed cuts by year-end, keeping real yields low and supporting gold.

Even after a 3% correction, the metal is trading well above its long-term averages, underscoring continued investor confidence in gold as a hedge against economic and geopolitical uncertainty.

Silver and Platinum Follow Gold’s Lead

Other precious metals have mirrored gold’s correction. Silver, which hit a record above $54/oz last week, is on track for a 5% weekly decline. Platinum rose briefly by 1.8%, but liquidity strains in London have caused price dislocations, with London prices trading at a $70 premium over New York futures.

Lease rates have surged, echoing similar dynamics in the silver market earlier this month when a liquidity crunch sent prices sharply higher.

Investor Outlook: Pause, Not Panic

For long-term investors, the current pullback is seen less as a reversal and more as a healthy cooling period. The structural drivers supporting gold—ranging from geopolitical risks to central bank accumulation—remain intact.

What to Watch Next

U.S. CPI data: The upcoming consumer price index will offer clues about inflation and the Fed’s rate path.

U.S.–China talks: Any progress in trade discussions could ease demand for safe havens.

ETF flows: Stabilization in fund outflows may indicate renewed investor confidence.

Conclusion: Gold Takes a Breather After Its Historic Run

Gold’s nine-week winning streak has finally paused — not because the rally is over, but because markets need time to consolidate. The correction is seen as part of a broader rebalancing after one of the strongest surges in recent history.

While traders may continue to take profits, long-term investors still view gold as a vital hedge in an uncertain macro environment. Whether the metal can reclaim its highs will depend on how inflation, central bank policies, and global trade relations unfold in the months ahead.

FAQs

Q1. Why is gold’s price falling after such strong gains?
Because the market had become overbought. Investors are taking profits following a nine-week rally, while ETF outflows and easing geopolitical tensions have added downward pressure.

Q2. Is this the end of gold’s bull market?
Not necessarily. Analysts view the current pullback as a short-term correction within a longer-term uptrend supported by central bank buying and global uncertainty.

Q3. How should investors respond to this correction?
Long-term investors can use the pullback as a potential entry point. However, traders should monitor key technical levels ($4,000 and $4,236) for signs of direction.

Q4. What factors could drive gold prices higher again?
A weaker U.S. dollar, additional Fed rate cuts, or renewed geopolitical tensions could all reinvigorate gold’s bullish momentum.