Gold Cools After Record Surge as Dollar Strengthens

Gold prices steadied on Wednesday after a brutal correction wiped out part of this year’s stunning rally. Spot gold was trading near $4,141 per ounce in early New York trading, up just 0.4%, following Tuesday’s 5.7% plunge, the largest single-day drop since 2013. 

The precious metal had soared to a record $4,381 on Monday before tumbling to as low as $4,082 as investors rushed to lock in profits.

The sell-off came after a 50% year-to-date surge driven by geopolitical anxiety, mounting US debt, and expectations that the Federal Reserve could cut interest rates further. Over the past two months alone, gold climbed nearly 25%, outperforming equities and most commodities as investors looked for safety amid a weakening economic outlook.

Tuesday’s reversal followed signs of easing trade tensions between Washington and Beijing and a rebound in the US dollar, which strengthened 0.6% against major peers. The dollar’s recovery, combined with renewed appetite for risk assets, drew funds out of safe havens. 

What Does This Mean for Me?

Elsewhere, silver and platinum mirrored gold’s slide, dropping 7% and 5% respectively. Analysts also cited a seasonal dip in Indian demand following the Diwali festival, which typically marks a peak in gold purchases. Despite the sharp correction, the metal remains up more than 40% over the past year, reminding investors that even in retreat, gold is still a steady safe haven.