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Gold sees largest drop since 2021

Gold prices posted their sharpest daily fall in four years on Tuesday, reversing from a record high amid profit-taking, a firmer US dollar, and easing safe-haven demand ahead of an anticipated summit between US and Chinese leaders. Asian stock markets softened midweek, led lower by the tech sector, with investors also digesting Japan’s return to export growth and new economic policy signals from Prime Minister Sanae Takaichi. European equities ended moderately higher, while the Dow Jones reached a fresh record on Tuesday, powered by robust corporate results and AI optimism. Traders shift their focus on midweek to Tesla’s third-quarter earnings due after US market close.

  • Date
  • Auteur Shane Strowmatt, Senior Investment Writer
  • Temps de lecture 5 minutes

Gold price
© Shutterstock

Gold prices saw the sharpest single-day decline in four years after rallying to a new high of USD 4381 per ounce at the start of the week. Gold fell more than 6% on Tuesday, before rebounding slightly on Wednesday to trade near USD 4140 per ounce. Gold miner stocks, which have soared this year, also plummeted on Tuesday. Overbought conditions, a firmer US dollar, and easing safe-haven demand ahead of a planned meeting between US President Donald Trump and China’s Xi Jinping all supported the reversal. Increased volatility and the absence of positioning data due to the ongoing US government shutdown have contributed to the pronounced correction. The US Dollar Index was slightly higher on Tuesday, while 2-year US Treasury yields remained below 3.5% and 10-year yields below 4%.

Asia-Pacific stocks mostly lower as tech sector drags

Asian equity markets mostly declined on Wednesday after two sessions of strong gains, with technology shares coming under pressure and investors digesting Japan’s latest trade data and policy outlook from recently appointed Prime Minister Sanae Takaichi. Japan reported a return to export growth in September, with exports rising for the first time in five months, although results missed market expectations and imports climbed above forecasts, resulting in a trade deficit of JPY 234.6 billion. Takaichi, sworn in as Japan’s first female prime minister on Tuesday, pledged to pursue fiscal stimulus and economic security measures amidst elevated public debt, drawing investor caution. Japan’s Nikkei 225 was essentially flat, showing minimal movement, while Korea’s Kospi was leading the region higher, trading 1% stronger. Australia’s S&P/ASX 200 was 0.7% lower, while Hong Kong’s Hang Seng Index dropped 0.9% and mainland China’s CSI 300 was 0.2% lower.

Dow Jones reaches fresh record high

The Dow Jones Industrial Average extended its rally on Tuesday, climbing 0.5% to a new all-time closing high of 46,924.74 points, while the S&P 500 finished flat and the Nasdaq 100 eased slightly. Investor sentiment was lifted by optimism over artificial intelligence investments and better-than-expected corporate earnings, including strong reports from industrial conglomerate 3M, soft drink maker Coca-Cola, and car manufacturer General Motors. These gains offset recent concerns over US-China trade relations and provided support amid expectations of declining interest rates and solid demand for AI-related technologies. Despite mostly positive quarterly updates during the ongoing earnings season, both Netflix (-6.2%) and Texas Instruments (-8.5%) shares fell sharply in after-hours trading in New York.

Swiss exports decline again in third quarter

Swiss foreign trade weakened for the second consecutive quarter, with exports falling by 3.9% and imports by 0.6% versus the previous quarter on seasonally adjusted terms in the third quarter of 2025, according to data published on Tuesday. The downturn was mainly due to declining sales in the large chemical and pharmaceutical sector, while watch exports dropped to their lowest since the second quarter of 2022. Despite the subdued trade environment, the trade surplus remained substantial at CHF 10.2 billion. Both US-bound exports and imports from South Korea showed marked moves, with the former dropping by 8.2% and the latter rising by 20.4%. The Swiss Market Index was little changed on Tuesday, while other European stock markets ended mostly in positive territory on Tuesday. The Euro Stoxx 50 rose by 0.1%, Germany’s DAX climbed 0.3% and France’s CAC 40 outperformed with a 0.6% gain.

Canadian inflation rises more than expected

Canadian annual inflation accelerated to 2.4% in September, up from August’s 1.9% and above what the market had forecast, according to data released on Tuesday. The increase was mainly attributed to a slower decline in petrol prices and ongoing pressures from shelter and food costs, with rent and grocery prices rising particularly strongly on the year. Key measures of core inflation remained well above 3%, highlighting persistent underlying price pressures despite the Bank of Canada recently shifting to assess a wider range of indicators. The rise in headline inflation led to a modest reduction in market expectations for an interest rate cut at the central bank’s late October meeting.

Corporate and economic calendar

Corporate news in focus: Quarterly figures from AT&T, Boston Scientific, IBM, Lam Research, SAP, Tesla, and Thermo Fisher Scientific.

Economic data in focus: UK Consumer Price Index (08:00) and European Central Bank President Christine Lagarde speaks (14:25).

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Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.