Gold prices drop as strong dollar and traders cash out after record run

Gold prices dropped as the US dollar became stronger and investors decided to book profits after a five-day rally that had pushed gold to fresh record highs. Traders were watching for clues on the US economy, but the government shutdown delayed key official data like the weekly jobless claims report.

Because of the missing government report, more attention went to private data from outplacement firm Challenger, Gray & Christmas, which showed that US employers slowed down hiring plans in September and announced fewer job cuts, as reported by Bloomberg.

Dollar index and gold price pressure

The dollar index went up, which put pressure on gold because the metal is priced in dollars. Also, since gold had made new peaks recently, it became more vulnerable to profit-taking by investors.


Gold has jumped 47% this year, making it the biggest annual gain since 1979, mainly supported by central bank buying and rising holdings in gold-backed ETFs as the Federal Reserve resumed rate cuts, according to the report by Bloomberg.

Fed rate cuts and investor outlook

Because of the shutdown, economists and policymakers now have to rely more on private reports to understand the labor market and economy. Even the non-farm payroll numbers, which were due Friday, will be delayed.

Traders expect the Fed to cut rates two more times this year to help the weakening labor market. Lower interest rates usually boost gold, since the metal doesn’t give yield but looks more attractive when borrowing costs fall. A softer dollar also makes gold cheaper for most buyers.

At 5:18 p.m. in New York, spot gold slipped to $ [number missing in source] an ounce, while the Bloomberg Dollar Spot Index rose. Silver and palladium also fell, but platinum stayed almost unchanged, as per the report by Bloomberg.

FAQs

Q1. Why did gold prices fall today?

Gold prices fell because the US dollar got stronger and investors booked profits after a big rally.

Q2. How much has gold gained in 2025?

Gold has jumped 47% this year, the biggest annual gain since 1979, supported by Fed rate cuts and central bank buying.