Breaking News: Gold Goes on a Roller Coaster, Slams the Brakes After Hitting New Highs

Let’s get straight to the point — the gold market put on a classic high-volatility show yesterday:

• New all-time high: Yesterday, international spot gold prices surged to above USD 4,634 per ounce, setting a fresh historical record and looking unstoppable.

• A sudden plunge: However, shortly after hitting the peak, gold prices dropped sharply — like an elevator heading straight down. By the close, gains had completely evaporated, with prices turning negative and settling near USD 4,586.

• This morning’s update: In early Asian trading today, gold is hovering around USD 4,595, moving in a narrow range as markets digest yesterday’s violent swings.

In short, gold experienced a rapid switch from “heaven” to “reality” within a single day. This kind of price action has many investors asking: Is the bull market coming to an end?

🤔 In-Depth Analysis: Three Key Reasons Behind Gold’s Sudden “Brake Slam”

Why did gold suddenly reverse course? Three main factors capped the rally:

1. The U.S. dollar made a comeback

This was the most direct driver. The U.S. Dollar Index rose 0.3% yesterday. A stronger dollar makes gold more expensive for non-U.S. buyers, reducing international demand and pressuring prices.

2. Investors took profits

Gold had surged rapidly from USD 4,500 to over USD 4,630 in a short period. Many short-term traders chose to lock in profits, creating collective selling pressure that pushed prices lower.

3. The “double-edged sword” of softer inflation

The latest U.S. inflation data came in milder than expected, which is normally bullish for gold because it could pave the way for rate cuts. However, the market interpreted this as giving the Federal Reserve less urgency to cut rates, cooling short-term rate-cut expectations and weighing on gold.

🛡️ Outlook: Support Remains, but Volatility Will Increase

Despite the short-term pullback, the core pillars of gold’s long-term bull case remain firmly intact:

Geopolitical powder kegs are still lit

U.S. tariff threats against Iran and policy uncertainty triggered by the investigation into the Fed Chair continue to fuel global market anxiety. At the first sign of trouble, capital is still likely to rush into gold as a safe haven.

Central banks keep buying

Central banks worldwide — especially those seeking to reduce reliance on the U.S. dollar — continue to treat gold as a strategic asset. In 2025, purchases were exceptionally strong, nearing 1,000 tonnes, and buying is expected to continue this year. This provides gold with its strongest long-term price floor.

Institutions remain bullish

Major institutions remain optimistic. Commerzbank has raised its gold forecast to USD 4,900 per ounce by the end of 2026, while Citigroup sees prices potentially reaching USD 5,000. This suggests professionals view the pullback as a consolidation rather than the end of the rally.

Bottom line

Gold’s long-term narrative — safe-haven demand and de-dollarization — remains unchanged. However, in the short term, prices will likely experience sharp swings driven by the dollar, investor sentiment, and technical adjustments, shifting from a full sprint into a bumpy stretch of road.