Gold crashes 6% a day after record high as Goldman holds $4,900 target

$4,381.21 to roughly $4,150 an ounce in less than 48 hours: that's gold's worst day since 2020. Goldman Sachs isn't backing off its bullish call.

Spot gold hit a record $4,381.21 an ounce on October 20. By October 22, prices had dropped more than 5%, landing around $4,124 to $4,150, the steepest one-day decline since August 2020. For a metal that had barely known a down day all year, it was a jolt. Gold is still up more than 60% in 2026, so this isn't a crisis for anyone who bought early. But it's the kind of drop that makes a trader who bought at the top on Monday feel sick by Wednesday.

The immediate trigger wasn't a single piece of news so much as a pile-up of profit-taking. Gold had run hard into the record, and once it broke, momentum traders who'd ridden the rally all year rushed for the exit at the same time. A stronger dollar made the move worse. Investors trimmed their bets on how aggressively the Federal Reserve will keep cutting rates, which pushed the dollar to its highest level in nearly three months and made gold, priced in dollars, more expensive for overseas buyers. Reuters reported that easing U.S.-China trade tensions also cut into bullion's appeal as a safe haven, giving traders one more reason to sell first and ask questions later.

Here's the thing: this is not gold's first violent drop this year, and it isn't even its worst. Back in late January, gold spiked to $5,594.82 an ounce, then crashed more than 9% in a single session, its largest one-day decline since 1983, according to Qatar News Agency. That collapse was driven by a sudden unwind of speculative positioning after a parabolic run. October's selloff is smaller and, so far, far less disorderly. But the pattern is the same: gold rips higher on central bank buying and dollar weakness, gets overextended, then snaps back hard when the fast money leaves.

Goldman Sachs is calling the October drop a temporary dip, not the start of a reversal, and it's keeping its $4,900 year-end target intact despite the pullback, according to a report from Yahoo Finance. The bank's argument rests on the same pillars that drove gold's run in the first place: steady central bank buying, which Goldman expects to keep picking up through the rest of the year, and a structural shift among reserve managers away from the dollar. None of that changed because momentum traders took profits on a Tuesday.

Other banks are leaning the same direction. Deutsche Bank has set a 2026 average price forecast of $4,450 an ounce with a trading range running as high as $4,950, and Bank of America has gone further, putting its 2026 outlook at an average near $4,400 with a ceiling of $5,000. None of these are hedged calls. They're banks telling clients to expect gold to keep climbing even after a drop that rattled retail traders.

That doesn't mean the bulls are right. Gold's two sharpest crashes this year both followed stretches where prices had gone nearly straight up, and both times the metal had to claw back credibility with buyers who'd just watched their paper gains evaporate in a day. A third straight-line run into year-end would set up the same risk again. The difference this time is that gold is falling from $4,381 toward a $4,900 target, a smaller gap than the one it faced after January's blowup, when it needed to recover from under $4,900 toward new highs just to get back to even.

What happens next probably hinges less on central bank purchases, which move slowly and predictably, than on what the Fed actually does on October 28. If the Fed cuts and signals more easing is coming, the dollar likely softens and gold gets its legs back fast. If Powell sounds hawkish the way he did after the last cut, when traders pulled their odds of a December cut down from over 90% to roughly 71%, according to CME's FedWatch data, gold could grind sideways or lower for a while longer. Either way, the metal that gained 60% this year didn't get there by moving in a straight line, and this week was a reminder of exactly how it does move.

Also read: Platinum crashed 44% from its January record and few noticed • Silver inches toward central bank reserve status as its historic rally cracks • Gold and silver tumble as the year's biggest rally hits a wall

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