Gold prices soared to all-time highs this year due to economic worries fueled by job losses and the tariffs-driven trade war.

The precious metal has risen over 50% year-to-date, including a 20% surge since April, when President Trump announced his “Liberation Day” reciprocal tariffs, fueling interest from gold bugs.

The gains significantly outpace stock market returns. The S&P 500 and Nasdaq have risen a more modest 15% and 19%, respectively.

The yellow metal has also performed much better than Treasury bonds, another safe-haven asset that investors tend to embrace during periods of uncertainty. The iShares 20+ Year Treasury Bond ETF (TLT) has gained about 8% thanks to Fed interest rate cuts.

While gold’s rally has been one for the ages, concerns that the rally is running on fumes have mounted, particularly given signs of a blow-off top driven by speculation have emerged, with record gold inflows into exchange-traded funds.

Concerns are particularly in focus now, given that gold prices appear to have hit the proverbial wall this week. On Oct. 21, they posted the most significant single-day drop in years, with the spot price tumbling over 6%, causing gold’s return over the past five days to slip by over 5%.

The drop has many wondering what’s next for gold. Is it a buy-the-dip moment, or the start of something more worrisome?

Gold rides tailwinds as job losses mount

Gold is a unique asset class in that it isn’t consumed, but stored, making it prone to jaw-dropping moves up and down as demand rises and falls alongside economic expectations.

Gold prices are retreating after rallying over 50% to all-time highs in 2025.

Costaseca/Lucas-AFP via Getty Images

This year’s rise has been supported by concerns that the U.S. economy could face a reckoning. While gross domestic product in the second and third quarters was above 3% suggesting a healthy economy, a peak under the hood suggests many cracks are forming.

For example, Challenger, Gray, and Christmas report that layoffs in 2025 through September totaled 946,426, up 55% year over year.

Related: Bank of America resets inflation forecast ahead of CPI

Unsurprisingly, unemployment data has grown worrisome. The Bureau of Labor Statistics reported that the unemployment rate reached 4.3% in September, its highest since 2021. While the shutdown in D.C. has delayed the September report, private data from payroll processors ADP and Bank of America suggest things didn’t get better last month.

ADP’s jobs data showed that the U.S. economy lost 32,000 jobs in September, while Bank of America data suggests small business hiring is retrenching and more of its customers are receiving unemployment checks.

“Some companies have said in Fed surveys that they are reducing hiring as one of several cost-saving strategies to cope with tariff costs,” wrote Goldman Sachs in a note to clients on Oct. 20.

Add those job losses to rising inflation, which is further crimping consumer budgets, and you have a recipe that suggests the U.S. economy isn’t as healthy as GDP implies. The Consumer Price Index data for September will be released on Oct. 24, but August’s report revealed prices rose 2.9% from one year ago, up from 2.3% in April before most tariffs were enacted.

“US GDP growth estimates have moved up sharply,” wrote Goldman Sachs. “We think these estimates overstate the strength because quarterly GDP numbers in 2025 are distorted by frontloading of durable goods purchases as well as volatility in inventories and net trade. Survey measures of both manufacturing and services growth—which are less affected by frontloading—remain around 50, consistent with stagnation or very slow growth.”

ISM’s manufacturing index was 49.1 in September, and its services index fell to 50 from 52 in August.

“The [Services] Business Activity Index moved into contraction territory in September, registering 49.9 percent, 5.1 percentage points lower than the reading of 55 percent recorded in August. This is the first time the index has entered contraction territory since May 2020,” noted ISM.

Analysts weigh in on gold price drop

While there are reasons underpinning interest in gold, veteran futures trader Carley Garner and long-time technical analyst Helene Meisler aren’t interested in buying the gold price dip.

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Garner has been warning that gold prices have become overheated for months, including on Oct. 20, when she noted a growing disconnect between Treasuries and gold prices.

“Money is flowing into gold ETFs at an unprecedented rate under the impression that doing so is an investment in a diversifying safety asset. Yet, gold is a non-income-producing commodity riddled with boom-and-bust cycles,” wrote Garner. “I never dreamt the spread between treasuries and gold, the two primary risk-off assets, would blow out in this manner.”

Instead of gold, she thinks a better route for investors is to avoid speculating on gold and shifting gears toward Treasuries, which have only recently begun to rally.

“The 10-year note futures contract has quietly broken out, with a high likelihood of a rally that puts the yield in the low 3% area and maybe even lower if the fundamental backdrop changes,” said Garner.

Helene Meisler has been navigating markets since the 1980s when she trained under legendary technical analyst Justin Mamis and served as Goldman Sachs first technical analysts.

Meisler weighed in on gold’s tumble on Oct. 21, and she’s also disinterested in buying here.

“I believe [SPDR Gold Trust] (GLD) will have to correct an awful lot or set up another big base as it had heading into September,” wrote Meisler. “Until there is a pattern in GLD, I am not a buyer. I believe there needs to be a big shakeout there. I’d be taking something off the table.”

Related: Bank of America resets gold price target for 2026