Is the Plunge in Gold Prices a Good Thing?

After a sustained surge, international gold prices recently entered a "sharp decline mode," falling below the $4,000 mark on Monday. However, some experts are unconcerned and anticipate that with the Fed poised for a second rate cut this week, the current pullback may represent a "buying-on-dips" opportunity.

Ryan McIntyre, Senior Managing Partner at Sprott Inc., an asset management firm focused on precious metals and critical materials, recently stated that a price correction was inevitable, but gold "remains well-positioned for long-term growth." He noted that persistently declining global trust levels are driving demand for assets independent of other assets and institutions.

"The world recognizes that exposure to the U.S. dollar remains too high, while exposure to gold remains too low. Therefore, we expect the price of gold, measured in all fiat currencies, to continue rising after the recent bubble," he said.

History provides context: The Fed last announced a rate cut on September 17. At that time, it lowered the federal funds rate by 25 basis points to a range of 4% to 4.25%, marking the first cut since 2025. Although gold prices closed lower the day after that decision, they mostly rose in the subsequent days, climbing to a record intraday high of $4,398 on October 20.

For investors who are under-allocated or have no exposure, McIntyre recommends gradually building gold positions over time. This approach helps avoid market timing, as "we view gold as a long-term strategic investment."