Wednesday's 6.6% decline in the gold price marked the biggest one-day fall for the yellow metal since 2013. And it caught most investors by surprise.
On Tuesday, bullion was trading at an all-time high just north of US$4,356 per ounce.
On Wednesday, the gold price plunged to US$4,067 per ounce.
Gold dipped even lower to US$4,063 per ounce overnight but has since edged back up to US$4,081 at the time of writing.
As you'd expect, this came as bad news for ASX gold stocks, with the S&P/ASX All Ordinaries Gold Index (ASX: XGD) plunging 8.5% yesterday.
As for some of the top S&P/ASX 200 Index (ASX: XJO) gold miners, Northern Star Resources Ltd (ASX: NST) shares dropped 8.8%; Newmont Corp (ASX: NEM) shares fell 9.6%; and the Evolution Mining Ltd (ASX: EVN) share price slumped 10.3%.
All three ASX 200 gold stocks are back in the green today and remain well up year to date, with the gold price still up 54% year to date.
During the Thursday lunch hour, the ASX All Ords Gold Index is up 1.5%, putting the basket of Aussie gold stocks up 90.8% in 2025.
So, was yesterday's outsized sell-off a bump in the road, or has the historic bull run for the gold price come to an end?
Image source: Getty Images
Has the gold price blown its top?
Zavier Wong, market analyst at eToro, told the Motley Fool, "The initial surge may have cooled off a little, but the underlying drivers are largely intact."
Looking ahead, Wong said:
We see central banks continue to accumulate reserves, and institutional demand for physical gold has yet to fade. The short-term story looks more like one of consolidation after an extraordinary rally. The longer-term one still hinges on how monetary policy, inflation, and geopolitical risk evolve from here.
Adrian Day Asset Management's CEO, Adrian Day, also expects that we haven't come to the end of the gold price bull run.
"I suspect we'll find a floor within a few days because the drivers of gold haven't changed; nothing has changed," Day said, (quoted by Bloomberg).
Day added
The Fed's not going to raise rates. The government is not going to fix the budget deficit. I can't see any fundamental factors that are going to meaningfully change to make people say, well, we don't need to buy more gold.
What about ASX gold stocks?
If the gold price does keep running higher over the coming year, ASX gold miners and their shareholders will be among the biggest beneficiaries.
But even if bullion prices stall or retrace further from here, most top ASX gold stocks should continue to achieve hefty profits.
VanEck's deputy head of investments, Jamie Hannah, noted that it costs Aussie gold miners an average of US$1,500 per ounce to produce the precious metal.
Hannah said (quoted by The Australian Financial Review):
They have spent years tightening bottom lines, creating efficiencies in their production process and making cost cuts, so they were ready for this bull market.
With prices above US$1,500 and even US$3,000, they're making good money, this latest rally has just been the cream on top.
