Core Viewpoint - The recent sharp decline in gold prices, dropping over 6.3% to below $4100 per ounce, is attributed to easing geopolitical tensions and a softening of trade attitudes from Trump, leading to profit-taking in the precious metals market [1][3]. Group 1: Market Performance - On October 21, gold prices experienced a significant drop, falling from around $4342 to $4068.7 per ounce within hours, marking the largest single-day decline since April 2013 [1]. - Prior to the drop, gold had surged over 2.5% on October 20, reaching a historical high of $4381.29 per ounce before closing at $4356.26 [3]. - The volatility in gold and silver prices indicates a potential overheating in the market, with the implied volatility of gold options exceeding 20, suggesting increased trading risks [3]. Group 2: Future Outlook - HSBC forecasts that gold's upward momentum may continue until 2026, with a target price of $5000 per ounce, driven by strong central bank purchases and ongoing concerns over U.S. fiscal deficits [5]. - The demand for gold is increasingly viewed as a hedge against debt sustainability risks and potential dollar weakness, particularly among emerging market central banks [5]. - However, HSBC warns that if the Federal Reserve's rate cuts are fewer than market expectations, the upward trajectory of gold prices may face challenges [5].