Gold ETFs Suffer a Rout Over Past Two Days: Buy the Dip

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, according to Bloomberg data, as quoted on Yahoo Finance. The gold bullion exchange-traded fund SPDR Gold Trust GLD lost about 6.9% over the past two days (as of Oct. 22, 2025).

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 article.

Some Analysts Viewed the Drop as a Temporary Pause

“This is just a bump in the road,” said Tom Essaye, founder of Sevens Report Research, in an interview with Yahoo Finance. 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. At the time of writing, gold spot price traded at $4,122.79.

Inside 2025’s Gold Rally

Year 2025 can easily be remembered for a gold rally. Note that the gold bullion ETF GLD has soared about 53.7% so far this year (as of Oct. 22, 2025). Over the past month, GLD has gained about 9%. In comparison, the S&P 500 has rallied 14.2% this year and 0.6% 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 government-issued money.

While Fed rate cuts may reduce 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.

Unlike gold, other so-called safe-haven ETFs have offered muted performances this year. Invesco DB US Dollar Index Bullish Fund UUP is down 6% in the year-to-date frame. iShares 7-10 Year Treasury Bond ETF IEF has added about 5.6% and Invesco CurrencyShares Japanese Yen Trust FXY has gained about 3.4% this year.

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, 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 IAUM could prove to be great bets right now.

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This article originally published on Zacks Investment Research (zacks.com).

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