Gold’s spot price peaked at $5,589 per troy ounce on Jan. 28, doubling from its price of $2,742 per ounce a year earlier.
That rally was driven by the Fed’s six consecutive rate cuts in 2024 and 2025, which softened the U.S. dollar and strengthened precious metals, as well as by macro headwinds that drove investors to accumulate more gold as a safe-haven asset
But since then, gold’s price has pulled back about 23% to $4,330. Should you capitalize on that pullback and invest in SPDR Gold Trust (NYSEMKT: GLD), the world’s largest gold ETF? Why did gold’s price decline?
Investors often buy gold as a hedge against the Fed’s expansionary monetary policies that weaken the U.S. dollar. Since gold, silver, and other precious metals are priced in U.S. dollars, they become more valuable as the U.S. dollar weakens. Geopolitical conflicts, fears of a market crash, and other economic uncertainties also tend to drive its price higher.