The ProShares Ultra Gold ETF (UGL), which seeks to deliver twice the daily performance of gold bullion, recorded a dramatic intraday plummet of 17.05% on Friday. The leveraged ETF's severe decline mirrors an intense, broad-based sell-off in the underlying gold market, following a period of explosive, parabolic price appreciation that pushed the precious metal to record highs above $5,600 per ounce earlier in the week.

The sharp movement was driven by a confluence of factors triggering a rapid correction in precious metals. Market analysts cited intense profit-taking pressure from investors after gold's rapid ascent, which saw prices surge approximately 27% in less than a month. Technical indicators had entered extreme overbought territory, with gold's Relative Strength Index (RSI) climbing to around 90, signaling that a pullback was widely anticipated.

Additional negative sentiment stemmed from reports that the Trump administration is preparing to nominate former Federal Reserve Governor Kevin Warsh as the next Fed Chair. The market perceives Warsh as a less dovish, or more hawkish, candidate compared to other contenders. This speculation boosted the U.S. dollar index, which naturally pressures dollar-denominated gold prices. The sell-off was characterized by some analysts as a healthy technical shakeout to digest profits and cool overheated market sentiment after a highly speculative and "unhinged" surge, though the medium to long-term bullish narrative for gold remains largely intact.