The gold market has experienced violent turbulence in recent days. Under the combined pressure of the Federal Reserve's hawkish stance, strong economic data, and a technology stock selloff, gold prices tumbled more than 3.7% in a single week, touching a low of $3,870 — a fresh low in over a year.
According to Kitco News' latest weekly gold survey, of the 16 Wall Street analysts who participated this week, only 1 (6%) is bullish on the outlook, 63% of respondents expect gold prices to continue declining, and another 31% anticipate sideways consolidation.
Meanwhile, in an online survey of 184 retail investors, 53% remain bullish on gold prices next week, with the bullish proportion far exceeding that of institutions. The domestic market confirms this divergence: at Caibai's flagship store, all investment gold bars below 30 grams were sold out, while gold hubs in Zhengzhou and Shenzhen's Shuibei were packed with crowds, as consumers rushed to buy the dip.
Goldman Sachs' commodities team's latest analysis reveals the deeper logic behind this unusual selloff: the driving force behind the scenes is not hedge funds, but sovereign entities forced to dump gold reserves to meet liquidity needs. Since September 22, the market has sold a cumulative $19.5 billion in gold futures positions, a pace far exceeding central banks' absorption rate of 85 tonnes per month. As of the time of writing, spot gold was quoted at $3,875.05 per ounce, down 3.74% for the week.
Multiple bearish factors converge, gold breaks through two round-number thresholds in one week
Gold got off to a relatively stable start last week. Spot gold was quoted at $3,994.95 per ounce on Sunday evening, rebounded slightly in early trading on dip-buying support, and on Tuesday, riding the tailwind of falling U.S. Treasury yields and a weaker dollar, briefly reclaimed $4,050, rising to a weekly high of $4,082.50 on the eve of the Fed's Wednesday rate decision.
However, the Fed voted 10-2 to keep the rate range unchanged at 3.75% to 4.00% — with two dissenters favoring an additional 25 basis point hike — and the hawkish signal made the rebound short-lived. On Thursday, better-than-expected U.S. third-quarter GDP data and elevated core PCE inflation data further reinforced expectations of tighter monetary policy, and gold prices came under renewed pressure, sliding back to around $4,000.
On Friday, technology stocks fell sharply amid concerns over the return prospects of artificial intelligence investments, triggering a cross-asset forced liquidation wave that dragged gold and silver down along with it. Gold prices successively lost the $4,000 and $3,900 round-number thresholds, touching a low of $3,870.25 — a fresh low in over a year — with a weekly decline of 3.74%.
Sovereign entities forced to sell, central bank absorption pace struggles to keep up
Goldman Sachs analyst Robert Quinn pointed out that the main sellers in this round came from the "other" category and non-reportable category, which together accounted for approximately 95% of total selling, not the hedge funds typically blamed. The market judges that sovereign entities, in order to meet liquidity needs, are dumping gold — their most liquid reserve asset — at any price.
This has created a structural dilemma: central banks, as "price-insensitive" structural buyers, continue to enter the market, but their buying pace is far slower than the current selling speed — "price-insensitive" buyers have met equally "price-insensitive" sellers. The $19.5 billion selloff was unleashed within five weeks, far exceeding central banks' capacity to absorb 85 tonnes per month.
Goldman Sachs also noted that CME volume last Friday surged 80% from the previous day, with GLD ETF single-day turnover of approximately $4 billion, ranking seventh among all ETFs in the market that day. Bearish sentiment in the options market has risen to the 85th percentile high over the past year, with the market actively positioning for further downside protection. Goldman Sachs warned that $3,850 could become the next line of defense, as positions have not yet been cleared and downside risks remain.
From a year-to-date perspective, gold prices have erased a substantial portion of their gains. Gold opened 2026 at approximately $4,318 per ounce, briefly touched an all-time high of $5,598 per ounce intraday on January 29, and has now retreated about 30% from its year-to-date high.
Wall Street unanimously bearish, technical and fundamental factors align
Professional pessimism was fully expressed this week.
FxPro senior market analyst Alex Kuptsikevich noted that gold prices have been in a downtrend for nearly two and a half months, consistently forming an almost perfect resistance line that is gradually pushing local highs lower. He pointed out that from the low four years ago to the high in January-February this year, gold prices have retraced 61.8% of the entire uptrend, touching the lower boundary of a classic correction. He also warned that this decline is accompanied by massive stock market selling, representing a typical margin-call selloff under a risk-aversion wave, where the market at this stage almost disregards price and is simply restoring positions to normal levels. Kuptsikevich maintains his original forecast scenario since the beginning of the year, expecting gold prices could fall to $3,300 per ounce.
Bannockburn Global Forex managing director Marc Chandler said gold prices were near $4,700 at the end of August, and the current decline shows that "gold's luster has dimmed." He noted that gold prices are now below the lower Bollinger Band (two standard deviations below the 20-day moving average), but a true capitulation selloff has not yet occurred. If a further year-to-date low is made, he believes gold prices could probe the $3,750 to $3,850 range.
StoneX Group senior commodities broker Daniel Pavilonis warned that this correction may be deeper and longer than most expect. "If we look purely at the technical level, the chart is not optimistic. Without any fundamental support, prices look like they could go further lower," he told Kitco News. He expects silver could fall to the high $30s, and gold could even drop to $3,000, possibly around the first quarter of 2027. Pavilonis compared the current situation to the precious metals market bubble burst around 1980, believing there is a cyclical pattern of deep correction after a peak, and advised bulls who already hold positions to begin hedging risk through collar option strategies.
Britannia Global Markets metals head Neil Welsh focused on policy signals. He believes that merely a Fed rate pause is not enough to boost gold prices — the market needs to see evidence of a real shift in policy direction, particularly substantial deterioration in the labor market. He noted that next Friday's nonfarm payrolls data will be a key test. If employment data is weak and accompanied by slowing wage growth, rising unemployment, or downward revisions to prior data, it could substantially reduce market expectations for a December rate hike, providing a more favorable macro backdrop for gold.
Retail investors buy the dip against the trend, domestic gold shops see crowds surge
In sharp contrast to Wall Street's bearish consensus, domestic retail investors are treating this decline as a rare buying window.
According to reports, at noon on November 1, the investment gold bar counter at Caibai's flagship store in Beijing was crowded, with an electronic screen showing a base investment gold price of 840 yuan per gram. All small-weight investment gold bars below 30 grams were sold out, with customers still asking whether there would be restocking that day, and some purchasing 100-gram investment gold bars on the spot. Reporters learned on-site that multiple consumers chose to enter in batches, with purchase prices ranging from 837 to 866 yuan per gram.
According to Elephant News, foot traffic at Shenzhen's Shuibei market surged to 60,000 visitors this weekend; venues such as Zhengzhou's Jinduo Yinduo Jewelry Plaza and Zhongyuan Jewelry City also saw significant peak traffic, with some merchants reporting today's gold price at approximately 860 yuan per gram, down about 250 yuan per gram from a month ago.
Beyond investment demand, wedding and holiday gift consumption has also picked up simultaneously. Some consumers said they were taking advantage of the price pullback to buy New Year gifts in advance, while some soon-to-be newlyweds admitted "this is to close out positions," as compared to purchase costs of over 1,000 yuan per gram at the beginning of the year, this round has provided some "unwinding."
Industry insiders caution: gold jewelry, due to premiums including labor costs, is recycled only at raw material gold prices, and should not be viewed through a gold speculation lens; since no institution can accurately predict gold price turning points, consumers with genuine needs can buy in batches, and investors are also advised to diversify allocations, avoiding heavy positions all at once.
Key events this week: midterm elections and nonfarm payrolls dominate the pace
The market is about to enter a dense event-driven window. The two most closely watched events this week are the U.S. midterm elections and the October nonfarm payrolls report.
On Tuesday, JOLTS job openings data will be released, with midterm elections held the same day; Wednesday brings ADP private sector employment and ISM services PMI; Thursday's focus shifts to the Bank of England's monetary policy decision and weekly initial jobless claims; Friday's finale is the October nonfarm payrolls data and the University of Michigan consumer sentiment preliminary reading.
Looking ahead, independent precious metals analyst Jesse Colombo also focused on geopolitical risk exposure this weekend, mentioning market concerns about a possible escalation of U.S.-Iran tensions, believing some selling may reflect a "sell first, ask questions later" risk-aversion logic. He noted that if gold prices effectively close below $3,900 on strong volume, the next key support would be around $3,500, but he emphasized this is only a technical reference level, not a baseline forecast.
SIA Wealth Management chief market strategist Colin Cieszynski directly characterized this week's trend as "bearish," believing a break below $4,000 is technically significant. Asset Strategies International president Rich Checkan took a relatively neutral stance, believing Middle East tensions and midterm election results have mutually offsetting effects, but he also stated that "every gold price decline should be viewed as a buying opportunity on dips."
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