Gold Enters Bear Market After $18 Billion ETF Exodus

Q: Experts predict gold could hit $10,000, so why did investors just pull $18 billion out of the market?

Investors pulled $18 billion from gold because short-term market forces turned sharply against it, even though some analysts still see a much higher long-term price. The immediate trigger was a stronger-than-expected U.S. jobs report, which led markets to scale back expectations for Federal Reserve rate cuts and even consider possible rate hikes. That pushed bond yields and the U.S. dollar higher, both of which typically hurt gold because it pays no income and becomes less attractive relative to interest-bearing assets. The selling was also a classic bout of profit-taking. Gold had surged for three years and reached near-record highs around $5,600 an ounce in January. After such a strong run, many investors locked in gains, especially through exchange-traded funds, helping drive prices below $4,000 and into a bear market. That does not necessarily contradict forecasts of $7,000 to $10,000 by 2030. Those targets are based on a longer horizon and assume persistent inflation, economic uncertainty, geopolitical stress, and continued buying by central banks and Asian investors. Analysts such as Ronnie Stoeferle argue the recent drop looks more like a mid-cycle correction than the end of a secular bull market. A key sign is that investors are not building large short positions to bet aggressively on further declines. That suggests many traders see the selloff as a repricing and consolidation phase, not a wholesale rejection of gold’s long-term appeal.

3 articles · Updated · Bloomberg · Jul 7

$18 billion has been pulled from gold ETFs tracked by Bloomberg since prices peaked near $5,600 an ounce in January, accelerating the metal's slide into a bear market last month.
Profit-taking ended a three-year bull run and drove gold below $4,000 an ounce on multiple occasions, marking a sharp reversal from its record highs.
Large-scale bearish positioning still appears limited, suggesting investors are locking in gains rather than broadly betting on a deeper collapse.