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Why Did Gold Melt? By Spencer Jakab
U.S. stocks are poised for a mixed open as investors mull the latest batch of quarterly earnings reports, including a disappointing one from Netflix
on Tuesday afternoon. Today's headliner is the world's most valuable and divisive car company, Tesla, which reports after the bell. AT&T, IBM and GE Vernova will be closely watched too.
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Monday's audacious Louvre heist
of France's crown jewels might just mark a temporary peak in the price of precious metals. Gold plunged by the most in more than a decade
a day later.
What explains the violent reversal in what had been its best year since 1979? Gold is one of the few commodities whose price is supposed to be "telling us something." You never hear that about wheat, zinc or pork bellies.
One difference is that gold isn't used for very much-it mostly just sits there. If you have $10,000 you don't care if it buys you five ounces, like it did a couple of years ago, or half as many, like it did on Monday. In the gold-crazy 1970s demand mattered somewhat: Dentists were forced to switch to porcelain, for example.
Now gold is an almost pure hedge against chaos, but its recent gains were as much about greed as about fear. It isn't as if world peace suddenly broke out Tuesday: Reversals in the asset du jour don't need a reason to happen, and they can be violent.
Past behavior doesn't provide much of a short-term price roadmap: According to Bespoke Investment Group, there have been six occasions in the past 20 years when gold prices began the U.S. trading day at least 3% lower. In the following month its price has been down by as much as another 19% from that opening price or up by as much as 18%.
It's easier to hop on the bandwagon than ever. Speculators used to need a safe place to store bullion, or access to a futures broker. Today there are leveraged long and short gold ETFs that anyone with a brokerage account can buy commission-free. Options activity in the largest gold fund hit a record last week.
You don't even need to subscribe to a newsletter or call a broker for flaky advice on when to buy or sell. Strangers offer it for free on the r/gold forum on Reddit , which gets 300,000 visitors a week.
Short-term moves in any asset without earnings, whether a meme stock or a metal, shouldn't be overanalyzed. Gold's big move in the past several months, though, was fueled by the "debasement trade , " which is worth thinking about for people who invest in anything. The dollar isn't being treated with much respect lately, and gold's price has begun to reflect that.
The jewel thieves are probably kicking themselves today for not snatching the Mona Lisa instead, but central banks and governments around the world are doing everything possible to make their hard work pay off.
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Stocks I'm Watching
Netflix : Shares of the internet streaming service tumbled more than 7% in premarket trading after it reported earnings
below analysts' expectations, citing an expense related to a dispute with Brazilian tax authorities.
Tesla : The electric-car maker is set to report earnings after markets close. Shares inched higher premarket.
DraftKings : The sportsbook operator, which has come under threat
from the entry of Kalshi and other prediction markets into sports betting, said Tuesday that it had bought a federally licensed exchange as part of a new prediction-markets strategy. Shares jumped more than 5% ahead of the opening bell.
Western Alliance : The Phoenix-based lender, whose shares sold off last week on concerns about its exposure to bad loans, reassured investors on Tuesday when it reported a rise in quarterly profit. Shares gained more than 2% in premarket trading.
Mattel : The Barbie maker's shares dropped more than 5% ahead of the opening bell following a disappointing earnings report late Tuesday. Mattel's earnings failed to meet analysts' forecasts as tariffs have hurt North American sales.
Barclays : The U.K. bank's shares rose nearly 4% in London after it announced a share-buyback program and raised guidance
for the year.
Heineken : The Dutch brewer forecast a decline in full-year beer volumes
and and said trade uncertainty had weighed on its U.S. performance. Still, its Amsterdam-listed shares gained.
Hermès International : Shares of the Birkin bag maker sank more than 4% in Paris after it reported growing sales in the third quarter but fell short of some analysts' revenue expectations. French cosmetics maker L'Oréal also fell on disappointing sales.
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What I'm Reading "Circularity" has become a buzzword in artificial-intelligence deals. Some investors have drawn comparisons between the megadeals of today and some excesses of the original dot-com bubble. ( WSJ ) The cost of Americans' health insurance rose steeply for a third year in a row in 2025, reaching just under $27,000 for a family plan. That's a 6% increase from the year before, and builds on two prior years of 7% gains. ( WSJ ) The Trump administration is pushing officials in Argentina to limit China's influence over the distressed South American nation at the same time the U.S. and Wall Street banks are working on a $40 billion lifeline. ( WSJ ) An activist investor pushing for big changes at Six Flags has teamed up with football star Travis Kelce. ( WSJ ) The U.S. agricultural sector is under a great deal of stress and becoming more dependent on government support. ( Econofact ) Today in Markets History
On this day in 1929, Yale professor Irving Fisher, one of the nation's foremost economists, said: "The breaks of the past few days have driven stocks down to hard rock. I believe that we will have a ragged market for a few weeks and then the beginning of a mild bull movement that will gain momentum next year." The Great Crash was days away and stocks stayed ragged for years.
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About Me
Business and finance have fascinated me for a long time. Before writing this newsletter, I edited The Wall Street Journal's Heard on the Street team for a decade, wrote two investment books and managed a team of stock analysts at a global investment bank.
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October 22, 2025 06:45 ET (10:45 GMT)
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