Gold prices, which had been soaring to record highs, recorded their largest daily decline in 12 years. While expectations of a benchmark interest rate cut and demand for safe-haven assets had driven up gold prices, analysts assessed that investors have begun taking profits.
Financial Times, FT, reported on the 21st, local time, that “physical gold prices peaked at $4,381.52 per troy ounce the previous day before falling by up to 6.3% to $4,082.03 on that day.” The decline marked the largest since 2013. Gold prices have continued to rise this year, surging approximately 60%. Notably, gold prices jumped 25% over the past two months. The rise in gold prices was driven by investors flocking to safe-haven assets amid concerns over increasing U.S. federal government debt, the dollar’s credibility, and trade wars triggered by tariffs imposed by President Donald Trump. The FT stated, “The biggest driver of this year’s gold price increase has been demand from central banks,” adding, “They are purchasing gold to diversify their reserves away from the dollar.” Institutional investors also poured funds into gold-linked exchange-traded funds (ETFs).
New York stock markets showed mixed performance. The Dow Jones Industrial Average rose 0.47%, while the Nasdaq Composite fell 0.16%, and the S&P 500 saw little change. General Motors, GM, surged approximately 15% due to optimistic remarks made by the company’s chief financial officer that morning, who stated, “We expect next year’s performance to surpass this year, which already far exceeded Wall Street’s expectations.” U.S. economic media outlet CNBC noted, “This was the largest single-day gain in about six years.”
