Gold’s glitter dims temporarily but the shine isn’t gone yet

October 28, 2025 (MLN): Gold prices have retreated sharply after reaching record highs this month, with spot prices sliding by nearly $460 in just ten days.

The pullback follows a steep five-month rally that saw the metal surge from about $3,200 an ounce in May to above $4,200 in October, its highest level since the late 1970s, before easing to around 3,905.65 an ounce as of [3:18 pm] PST, according to data reported by Mettis Global.

The decline is described as a natural correction following one of gold’s strongest runs in decades.

The roughly 5% drop in global prices is largely attributed to profit-taking after the extended rally, with technical indicators pointing to a short-term consolidation rather than a reversal of the broader bullish trend.

In Pakistan, domestic gold prices have mirrored the global trend, falling by about Rs40,000 per tola since the October 17 peak.

The decline followed international prices slipping below $4,000 an ounce, extending losses from the steepest global rout in more than a decade.

The reversal comes after a blistering rally that briefly lifted gold to a record $4,380 an ounce last week, driven by expectations of Federal Reserve rate cuts and a weaker dollar.

Speculative retail buying has pushed the metal into overbought territory, prompting a sharp correction once progress on a US–China trade deal reduced safe-haven demand.

Despite the pullback, gold remains up more than 50% this year, supported by strong central bank purchases and continued investor accumulation.

Investors are now closely watching the outcome of the U.S. Federal Reserve’s policy meeting, which concludes on Wednesday.

Markets widely expect the Fed to cut interest rates, and analysts say any forward guidance from Chair Jerome Powell could influence short-term momentum in bullion prices.

Institutional demand for gold remains resilient. Exchange-traded funds (ETFs) have continued to record inflows, while central banks, particularly in emerging markets, have expanded their reserves by more than 1,000 tons in 2024.

Analysts view this as a long-term shift away from US dollar holdings amid global geopolitical and economic uncertainty.

The mining sector also reflects growing confidence in gold’s fundamentals. It can be noted that renewed merger and acquisition activity highlighted by major producers acquiring undervalued junior miners signals a revival of strategic consolidation.

Silver has mirrored gold’s trajectory, retreating alongside other precious metals as investors adjusted positions.

However, ongoing supply constraints and industrial demand are acting as key factors supporting prices over the longer term.

While short-term volatility may persist, the overall outlook for gold remains positive. With central banks continuing to accumulate reserves, institutional investors showing sustained interest, and major miners regaining financial strength, gold is expected to retain its appeal as a safe-haven asset in a volatile global economy.

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