Gold Crashes: Is the Bull Run Ending?

On February 28, gold prices saw a notable drop, with COMEX gold falling to $2,832.5 per ounce—down more than 4% from its record high of $2,974 per ounce on February 24. By the end of the day, gold futures closed at $2,867.3 per ounce, marking a weekly decline of 2.79%.

Multiple factors influence gold prices.

Global geopolitical tensions and changes in the monetary system continue to drive gold demand. Particularly, amid the trend of de-dollarization, central banks worldwide are increasing their gold reserves, and this trend is expected to continue in 2025.

Meanwhile, the Federal Reserves monetary policy remains a crucial factor. If the Fed begins cutting interest rates, declining real interest rates will lower the cost of holding gold, potentially driving prices higher.

Over the past decade, gold prices have undergone five distinct phases. In 2015, prices experienced a period of volatility and decline, reaching a low of $1,045.4 per ounce. From 2016 to 2018, prices remained range-bound. Between November 2018 and August 2020, gold surged to a record high of $2,089 per ounce. From September 2020 to 2022, prices fluctuated at elevated levels. Since November 2022, gold has once again broken previous records, with an overall gain of 84%.

Looking ahead, gold is likely to maintain a long-term upward trajectory but remains susceptible to short-term corrections. Investors will continue to monitor global developments and the Feds policy direction. Whether the gold bull market will persist remains a key question for the market.