Gold’s all-time high rally was rocked this week. Having rocketed above $4,000 an ounce earlier this month, prices declined close to 7% over two sessions up to Oct 22. The lead SPDR Gold Trust (NYSE:GLD) reflected the drop, ending a months-long streak of gains that made 2025 one of gold’s best on record.
Why ETFs Pulled Back
The pullback occurred as U.S.–China trade tensions eased, the dollar strengthened, and technical exhaustion followed the metal’s stratospheric rally. Traders call the move “an elastic band snapping back” and indicate it is a short-term rebalancing rather than an implosion.
Although the drop occurred, analysts note that the underlying drivers of gold’s rise remain in place: ongoing inflation, expanding U.S. deficits, and continuing geopolitical tensions continue to support bullion as a favored safe-haven commodity.
The Long-Term Drivers Remain
For potential investors in gold ETFs, the correction could be a buying opportunity. Long-term predictions continue to be strong. Goldman Sachs recently increased its 2026 gold price target to $4,900 an ounce, while Bank of America foresees prices potentially reaching $6,000 by mid-2026. GLD, iShares Gold Trust (NYSE:IAU), and SPDR Gold MiniShares (NYSE:IAUM) all offer easy exposure to bullion, and flows into these products, albeit tempered, still reflect strong investor demand.
HSBC forecasts that gold prices could reach $5,000 per ounce by early 2026, driven by sustained safe-haven demand and increased central bank purchases.
Moreover, back in September, TD Securities had somewhat predicted this correction. It said that while the rapid rally makes gold look overbought and potentially poised for a short-term correction, the long-term outlook remains bullish, with prices possibly setting new records in the first half of 2026.
What's Ahead For Gold ETFs?
Based on analysts’ views on gold prices in the coming months, the next few months might see gold ETFs trading in a range or slowly rising, rather than repeating the explosive first-half rally. Any renewed inflation pressures, Fed rate cuts, or geopolitical shocks can revive demand, while a strong dollar or abating trade risks can cap gains short-term.
Options markets are exhibiting elevated volatility, suggesting traders are gearing up for both short-term fluctuations and longer-term gains.
That is, the dip might be less a warning and more an entry point for investors who are convinced that the longer-term de-dollarization trend and the long-term appeal of gold as a hedge hold promise. In the meantime, GLD, IAU, and IAUM are still the vehicle of choice for those who wish to ride the shimmy and wobble of the world’s most celebrated safe haven.
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