Core Viewpoint - The gold market experienced a significant drop on October 22, with both spot gold and gold futures prices plummeting, marking the largest single-day decline since August 2020, primarily due to profit-taking by investors, a stronger dollar, and a rebound in market risk appetite [1][3]. Price Movement - On October 22, spot gold prices fell by 5.5%, closing at $4,115.26 per ounce, the lowest level in a week [1] - December gold futures dropped by 5.7%, settling at $4,109.10 per ounce, representing the largest single-day decline since August 2020 [1][3]. Preceding Bull Market Factors - The gold price surge prior to the drop was driven by three main factors: 1. Increased expectations of interest rate cuts by the Federal Reserve, making gold more attractive as a non-yielding asset [3][5]. 2. Geopolitical uncertainties leading to heightened demand for gold as a safe haven [5]. 3. Central banks' ongoing gold purchases to diversify reserves and reduce reliance on a single currency, providing long-term support for gold prices [5]. Trigger for the Drop - The immediate cause of the price drop was concentrated profit-taking by investors, as indicated by a significant shift in market sentiment following the recent peak [7]. - The dollar index rose by 0.4%, increasing the cost of gold for holders of other currencies, which added downward pressure on prices [7]. Market Reaction - The decline in gold prices triggered a chain reaction in the precious metals market, with silver, platinum, and palladium also experiencing significant sell-offs [7]. - Silver saw the most substantial drop, falling by 7.6% to $48.49 per ounce, while platinum and palladium dropped by 5.9% and 5.3%, respectively [7][8]. Future Outlook - Investors are now focused on the upcoming U.S. Consumer Price Index report, with expectations of a 3.1% year-over-year increase in inflation, which could reinforce predictions of a 0.25 percentage point rate cut by the Federal Reserve [8]. - Long-term support for gold remains strong if the Fed proceeds with rate cuts, although short-term volatility is expected as profit-taking continues and market reactions to economic data unfold [8].

Core Viewpoint - The significant drop in gold and silver prices on October 21 is attributed to profit-taking, easing global trade tensions, and a stronger US dollar, which has made precious metals more expensive for buyers [1][3]. Price Movements - On October 21, spot gold experienced a drop of over 5%, falling below $4,130 per ounce, marking the largest daily decline since August 2020. Spot silver saw an even larger decline, dropping over 7% and falling below $49 per ounce [1][3]. - Prior to this drop, gold had surged nearly 3% to surpass $4,300 per ounce on October 16, and silver had increased over 2% to exceed $54 per ounce, both reaching historical highs [3]. Market Influences - Analysts indicate that profit-taking and a reduction in safe-haven demand due to easing trade tensions are primary factors behind the recent price declines. Additionally, news regarding the potential end of the US government shutdown has further diminished market risk aversion [3][5]. - The geopolitical situation, particularly the Russia-Ukraine conflict, has also introduced volatility in the gold market, with European leaders expressing strong support for a ceasefire and increased pressure on Russia [1]. Future Outlook - Analysts from WisdomTree and UBS suggest that while gold prices may continue to rise, the current pace of increase is aggressive, leading to potential pullbacks whenever new highs are reached [5]. - HSBC forecasts that the momentum for gold prices could persist until 2026, driven by strong central bank purchases and ongoing fiscal concerns in the US, with a target price of $5,000 per ounce [6]. - Long-term bullish sentiment on gold remains intact, with factors such as US fiscal deficits and the depreciation of the dollar continuing to support gold as a hedge against currency weakness [6][7].