Gold prices bounced back on Wednesday, regaining ground after two days of heavy selling that saw the metal suffer its steepest decline in more than a decade.
At the time of writing, gold futures (GC00) were up 2.3% to US$4,159.70 per ounce, following a sharp 5.7% plunge on Tuesday — the largest one-day drop in over 12 years. The correction came after a record-breaking run, as investors booked profits amid fears that the metal had become temporarily overbought.
MUFG analyst Soojin Kim noted that gold-backed exchange-traded funds saw their largest single-day outflow in five months, describing the move as “a sign of a technical correction and profit-taking rather than a structural reversal.”
Gold Remains a Haven Amid Global Instability
Despite short-term volatility, gold continues to hold its ground as the preferred safe-haven asset in a time of heightened global uncertainty. Ongoing U.S. government shutdown concerns, coupled with instability in the Middle East and Ukraine, have reinforced its appeal to investors seeking security.
“Markets are also keeping a close eye on upcoming U.S.-China trade talks, which could ease tensions that previously fuelled demand for defensive assets,” Kim added.
Strong Fundamentals Support Long-Term Outlook
Even after this week’s pullback, gold remains up nearly 60% year-to-date in 2025, underscoring the strength of its long-term momentum. The rally has been underpinned by aggressive central bank buying and expectations of interest rate cuts by the Federal Reserve — both key drivers that continue to support higher prices.
According to J.P. Morgan’s Global Commodities Team, the fundamentals behind gold’s rise remain “solid and structural.” The bank estimates that if foreign managers of U.S. assets continue to diversify even modestly — reducing U.S. exposure from 45% to 43% and reallocating just half a percentage point into gold — the metal could soar to US$6,000 per ounce by 2028.
“It’s a very clean story,” the analysts said. “You have a lot of buyers and virtually no sellers.”
Supply Constraints Add to the Bullish Case
Gold supply has remained largely unchanged since 2018, adding further upward pressure to prices as demand continues to rise globally. This tight supply dynamic is amplifying the effects of strong institutional and central bank accumulation.
Miners and Other Precious Metals Climb
The rebound also lifted gold mining stocks and other precious metals.
Newmont (NEM) gained 1.7% after a 9% drop earlier in the week, ahead of its quarterly earnings report.
Barrick Mining rose 2.6%, while Agnico Eagle Mines advanced 0.9%.
Silver (SI00) surged 2.9% to US$49.10, and platinum (PL00) jumped 3.7% to US$1,610.30.
The latest rebound reinforces gold’s resilience amid short-term volatility. With J.P. Morgan forecasting a potential climb toward US$6,000 by 2028, supported by structural demand and constrained supply, the long-term trajectory for gold remains powerfully bullish.
