Gold prices tumbled sharply on Oct. 21, 2025, marking their largest daily slump in years as a record-breaking rally in precious metals finally hit a bump. The spot gold declined more than 6% on Oct. 21, 2025 (at the time of writing), marking its biggest one-day slide in 12 years, according to Bloomberg data, as quoted on Yahoo Finance. SPDR Gold Shares GLD lost about 6.4% on the day.
What Led to the Sudden Selloff
The sharp correction came amid easing U.S.-China trade tensions, a stronger U.S. dollar, and technical signals suggesting the metal had entered overbought territory, per the same Yahoo Finance article.
Some Analysts View the Drop as a Temporary Pause
Tom Essaye, founder of Sevens Report Research, views this drop as a temporary bump. He highlighted that still-high inflation, low real interest rates, geopolitical uncertainty, and U.S. government shutdown continue to support a bullish outlook for gold, as quoted in the above-said Yahoo Finance article.
The Yahoo Finance article went on to highlight the bullish outlook for gold by several investment houses. Bank of America recently reiterated its “long gold” stance, predicting prices could reach $6,000 per ounce by mid-2026. Goldman Sachs has also raised its forecast, expecting the metal to hit $4,900 per ounce by the end of next year, up from the prior mentioned $4,300.
Inside 2025’s Gold Rally
Year 2025 can easily be remembered for a gold rally. Gold bullion ETF SPDR Gold Trust GLD has soared about 54% so far this year (as of Oct. 21, 2025). Over the past month, the ETF has gained more than 9%. In comparison, the S&P 500 is up 15% so far this year and has gained about 0.7% in the past month.
In an environment marked with global instability, geopolitical tensions and the strong likelihood of Fed rate cuts, investors are flocking to gold as a reliable safe-haven asset. The current U.S. government shutdown has sparked demand for this safe-haven metal even more.
Another key driver of the gold rally has been surging central bank demand, especially from BRICS nations and emerging economies that are actively working to diversify away from the U.S. dollar. This global de-dollarization trend has resulted in record levels of sovereign gold purchases.
Dalio Recommends 15% Gold Allocation
Bridgewater Associates founder Ray Dalio advised investors to allocate up to 15% of their portfolios to gold, even as the precious metal surged past $4,000 an ounce, as quoted on CNBC. Dalio stressed on gold’s unique role as a hedge against monetary debasement and geopolitical uncertainty.
Dalio compared today’s market environment to the early 1970s, a period of high inflation, heavy government spending and growing debt, which hurt confidence in paper assets and fiat currencies.
While Fed rate cuts may cut the value of the greenback now, the strong supply of debt also makes debt instruments unappealing. This leaves gold as the only credible source of safe haven at present.
Gold to Hit $10,000 by 2030?
Gold may reach $10,000 an ounce by 2030, per market expert Ed Yardeni, as quoted on Business Insider. President Trump's tariffs, his attempts to pressure the Fed to lower interest rates, and China's real estate woes are expected to drive gold higher, per Yardeni.
ETFs in Focus
For investors looking to capitalize on this bullish trend, gold ETFs, such as SPDR Gold Trust GLD, iShares Gold Trust IAU, and SPDR Gold Minishares Trust of beneficial interest IAUM could prove to be intriguing bets.
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SPDR Gold Shares (GLD): ETF Research Reports iShares Gold Trust (IAU): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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