"We've reached the peak of euphoria": gold price falls sharply after record update

The cost of gold in trading on January 29 showed the sharpest decline since October. It collapsed by 5.7% after reaching a new high earlier in the day, rising above $5500 per ounce. Silver was falling 8.4 percent. The decline in metals prices coincided with a slight strengthening of the U.S. dollar, Bloomberg wrote. The dollar index was up 0.3% on Thursday.

The fall in the stock market also triggered selloffs in other assets, including precious and industrial metals, said Phil Stribble, chief market strategist at Blue Line Futures. "It looks like we've reached peak euphoria," he said in an interview with Bloomberg.

Gold has risen sharply since the beginning of the year amid rising geopolitical tensions and investors' worries about the threat to the independence of the Federal Reserve, which fueled the so-called devaluation trading strategy, Bloomberg writes. This month alone, the metal added more than 20%, and some technical indicators pointed to an impending correction, the agency emphasizes.

"Given the overheated markets and the dominance of flows over fundamentals, it doesn't take much for a correction," Carsten Menke of Julius Baer Group told Bloomberg.

This article was AI-translated and verified by a human editor