Gold prices rose over 1% on Thursday after two consecutive sessions of losses, as renewed geopolitical risks bolstered safe-haven demand and as investors sought safety.
Gold prices rebound
Spot gold was up 1% at $4,132.76 per ounce, after falling to a near two-week low in the previous session. U.S. gold futures for December delivery settled 2% higher at $4,145.60 per ounce.
Prices hit a record high of $4,381.21 on Monday, but logged their steepest drop in five years in the following session.
“All the fundamental factors that have driven gold higher this year remain very much in place. There was some opportunistic buying on the dip and perhaps some uptick in trade and geopolitical tensions that are fostering today’s bid,” Peter Grant, vice president and senior metals strategist at Zaner Metals, told Reuters on Thursday.
Gold prices have gained about 57% this year, driven by geopolitical tensions, economic uncertainty, expectations of rate cuts, and sustained central bank buying.
Gold came under heavy selling pressure Thursday, plunging 5.3% by the close, with losses extending into Asian trading. Analysts attributed the decline mainly to profit-taking after weeks of overbought momentum.
Since late August, gold had surged nearly $1,000 per ounce, raising concerns about the sustainability of its rapid climb. Additional downward pressure came after President Donald Trump expressed optimism about reaching a “good deal” in trade talks with China, which dampened safe-haven demand, according to a report from ING Thinktank on October 22.
“The move higher in gold in recent months has been predominantly driven by ETF buying. In dollar terms, investors bought a record volume of gold ETFs over September, while in terms of tonnage, the buying seen over the last month was the largest since March 2022,” the report stated.
Global drivers: Central banks, policy, and investor behavior
According to The Economic Times, the earlier surge in gold prices was fueled by central bank purchases, dovish signals from the U.S. Federal Reserve, and strong inflows into gold-backed ETFs.
Meanwhile, Oxford Economics, cited by ABC News, warned that investors may be viewing economic data through “rose-colored glasses,” noting that future rate cuts will likely depend on broader economic conditions, resulting in a slower pace of easing.
Bank of America’s chief investment strategist Ed Yardeni struck a cautious tone, warning, “There are bubbles out there. They will burst because that’s what bubbles do.”
Some analysts now suggest that gold itself could be entering bubble territory as investor behavior shifts. Instead of viewing gold solely as a hedge against inflation or a weaker dollar, many investors are increasingly using it as protection against equity market volatility.
Impact on Egypt
Egypt’s gold market mirrored global trends. According to Dahab Masr, local gold prices fell on Saturday, in line with international movements and exchange rate fluctuations.
At 2:35 pm, 24-karat gold traded at EGP 6,343 per gram for buyers and EGP 6,308 for sellers, while 21-karat gold—the country’s most traded grade—stood at EGP 5,520 for buying and EGP 5,550 for selling. The gold pount hit EGP 44,400 on Saturday.
Goldman Sachs: Institutional demand still firm
Despite market turbulence, Goldman Sachs reported that major investors remain committed to gold. After the metal’s record high near $4,380, spot gold saw its sharpest one-day drop in 12 years on Tuesday, with declines extending midweek.
In a Wednesday note, Goldman analysts Lina Thomas and Daan Struyven attributed the sell-off to “a rush of speculative unwinds in the options market” and “spillover from the silver trade.” However, they emphasized that the bank remains “structurally bullish on gold.”
The analysts pointed to sustained ETF inflows and noted that long-term institutional investors—including sovereign wealth funds, pension funds, and asset managers—are expected to expand gold holdings as a hedge against volatility and macroeconomic uncertainty.
“These investors typically operate on multi-quarter approval cycles and multi-year horizons, implying upside risk to our forecast,” they wrote. “If such private investors were to seek stores of value outside the financial system amid global macro uncertainty, even modest reallocations from global bond and equity portfolios could substantially raise prices in the relatively small gold market.”
Goldman maintains its $4,900-per-ounce target by the end of 2026, signaling continued confidence in gold’s long-term trajectory.
Broader market outlook
The recent correction also reflects improving global sentiment. The White House confirmed Thursday that President Donald Trump will meet Chinese President Xi Jinping in South Korea next week, raising hopes of progress in U.S.-China trade relations and easing safe-haven demand.
According to Investing.com, traders also turned cautious ahead of the delayed release of the U.S. Consumer Price Index (CPI) for September, a key indicator for the Federal Reserve’s policy direction.
Meanwhile, the U.S. dollar held firm on Friday and was on track for a weekly gain, making gold more expensive for holders of other currencies and adding to the week’s downward pressure.
Looking ahead
While gold’s sharp pullback marks the end of an extraordinary rally, analysts view it as a healthy correction rather than a reversal. With central banks and institutional investors maintaining strong demand, the metal’s long-term appeal as a store of value and hedge against uncertainty appears intact.
