GOLD extended losses in volatile trading following its worst rout in more than 12 years, though analysts expect the metal to regain momentum in 2026, said Bloomberg News.
Spot gold fell below $4,020 an ounce during US trading hours after swinging nearly three percent lower before recovering. The decline followed Tuesday’s 6.3% tumble, with technical indicators showing the record-breaking rally had become overstretched.
“Technical selling has been the main culprit,” Suki Cooper, head of commodities research at Standard Chartered told the newswire on Wednesday. “Prices have been trading in overbought territory since the start of September,” she added, noting the bank expected gold to regain momentum next year.
The pullback halted rapid gains since mid-August driven by the so-called debasement trade, where investors shun sovereign debt and currencies to protect against budget deficits, alongside expectations for Federal Reserve rate cuts, said Bloomberg News. Gold remains up approximately 55% this year.
Citigroup reduced its overweight gold recommendation following Tuesday’s slump, citing stretched positioning. The bank expects further consolidation around $4,000 an ounce in coming weeks.
“Eventually the older part of the gold bull story — continued central bank demand to diversify away from the US dollar — may come back, but at current levels there is no rush to position for that,” Citigroup strategists said, adding prices had “run ahead of the ‘debasement’ story.”
President Trump’s trade policies and geopolitical uncertainty have underpinned precious metals gains this year, said Bloomberg News. Central banks seeking dollar alternatives have maintained purchases, whilst exchange-traded funds attracted retail investors, it added.
