Gold Falls 10% From Its All-Time High

Gold prices fell in both local and global markets during Tuesday’s trading session, pressured by a decline in demand for safe-haven assets and growing optimism that a new trade deal between the United States and China is within reach, according to a report from “iSagha,” a platform specializing in gold and jewelry trading.

Saeed Embabi, CEO of the platform, said that local gold prices dropped by EGP 120 during today’s session, with 21-karat gold recording EGP 5,260 per gram, while the global ounce declined by $71, settling at $3,918.

The report noted that 24-karat gold was priced at EGP 6,011, 18-karat at EGP 4,509, and 14-karat at EGP 3,507, while the gold pound coin remained stable at EGP 42,080.

It added that gold prices had already fallen by EGP 170 on Monday, as the 21-karat gram started the week at EGP 5,550 and closed at EGP 5,380. Globally, the ounce dropped by $125, opening at $4,114 and closing at $3,989.

Price correction after October’s historic peak

The yellow metal extended its losses for a second consecutive day as investors steered away from safe-haven assets and returned to riskier holdings, buoyed by market optimism over a potential U.S.–China trade truce. Attention is now focused on the upcoming meeting between U.S. President Donald Trump and Chinese President Xi Jinping, scheduled for Thursday on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit in South Korea.

Gold has now corrected by nearly 10% from its all-time high of $4,381 per ounce, reached on October 17, following an extraordinary rally driven by global economic and geopolitical concerns. Traders are currently rebalancing portfolios and taking profits ahead of the Federal Reserve’s policy meeting set for Wednesday.

Market focus: Fed decision and Powell’s remarks

Expectations suggest that the Federal Reserve will cut interest rates for the second time this year, after lowering them by 0.25 percentage points in September — its first move since December 2024. Although markets have largely priced in the expected cut, investors will be closely monitoring Fed Chair Jerome Powell’s statements.

If Powell strikes a cautious, dovish tone, it could support gold as a non-yielding asset. Conversely, a hawkish stance might limit any rebound and keep gold prices near recent lows.

Trade truce and improving risk sentiment

In related developments, President Donald Trump expressed optimism about reaching an agreement with China, saying he holds “great respect for President Xi” and believes the two sides are “on the path to understanding.” His comments came after U.S. and Chinese negotiators reached a framework deal over the weekend, paving the way for the upcoming summit.

This progress helped ease fears of renewed escalation ahead of the current trade truce’s expiration on November 10. U.S. Treasury Secretary Scott Besant announced that China would delay new restrictions on rare-earth exports for one year and would undertake large-scale purchases of U.S. soybeans, while the threat of imposing 100% tariffs on Chinese goods was removed from the negotiation agenda.

Regional diplomacy and trade cooperation

As part of the U.S.’s efforts to strengthen its economic ties across Asia, President Trump met Japanese Prime Minister Sanae Takaichi in Tokyo for talks focused on trade and economic security. Both sides announced a new agreement on critical and rare minerals aimed at reinforcing supply chains and reducing dependency on China, with Japan pledging to increase imports of U.S. agricultural and automotive products.

In addition, the U.S. signed new trade agreements with several Southeast Asian countries, including mutual tariff deals with Malaysia and Cambodia, and preliminary trade frameworks with Thailand and Vietnam.

Analysts’ outlook and ETF flows

A Reuters survey revealed that analysts expect gold to average $4,275 per ounce in 2026, while revising the 2025 forecast upward to $3,400 from $3,220 in July. The improved outlook reflects persistent geopolitical uncertainty, robust central-bank demand, and expectations of further Fed rate cuts that continue to support the metal’s long-term bullish trajectory.

Meanwhile, global gold-backed exchange-traded funds (ETFs) saw outflows for the third consecutive day, with total holdings falling to 98.19 million ounces as of October 24, marking the first weekly net outflow after eight weeks of gains. Despite this, holdings remain near a three-year high, up 15.6% since the start of the year.

Market sentiment: healthy correction amid macro uncertainty

Analysts view the current decline as a healthy correction following record-breaking gains, reflecting a balance between economic caution and trade optimism.

With the U.S. government shutdown ongoing and geopolitical tensions still simmering, gold’s long-term outlook remains positive. Moreover, as markets anticipate further rate cuts, any additional short-term weakness is expected to be limited and temporary, keeping the precious metal’s long-term uptrend intact.