Spot Gold prices came under significant pressure yesterday, with the market settling 5.3% lower on the day. This downward pressure has only continued in early morning trading in Asia today. The catalyst appears to be profit-taking in a market that has been hugely overbought in recent weeks, ING's commodity experts Ewa Manthey and Warren Patterson note.

Gold rises predominantly moved by ETF buying

"The scale and pace of the rally in spot Gold have been dramatic, with prices having gained as much as $1,000/oz since late August. Clearly, market participants were getting increasingly nervous over the sustainability of the uptrend. In addition, comments from President Trump that he expects a 'good deal' when it comes to trade talks with China have only added to the downward pressure on Gold."

"The move higher in Gold in recent months has been predominantly driven by ETF buying. In dollar terms, investors bought a record volume of Gold ETFs over September, while in terms of tonnage, the buying seen over the last month was the largest since March 2022."

"Other precious metals have been unable to escape the sell-off. Silver settled more than 7% lower yesterday, while Platinum and Palladium closed 5.2% and 6.1% lower, respectively."