Gold's Bull Run Falters as Prices Plunge 3.35% in Sharp Decline

Gold prices have plummeted to their sharpest one-day decline since early June, dipping by as much as 3.35%. This significant drop has left investors wondering if the precious metal's bull run has finally come to an end.

The decline was largely driven by profit-taking by Chinese investors ahead of the Golden Week holiday starting Thursday, according to Saxo Bank analysts.

Technically speaking, gold's daily chart shows a clear break below a bearish setup that formed over weeks. The Relative Strength Index (RSI) has dropped to around 37, which suggests that the downside still has room to run.

The short-term fundamentals are unambiguously hostile, with rising Treasury yields and a stronger dollar index making it more expensive to hold gold. However, some investors remain bullish on gold's long-term prospects, citing unsustainable US government debt and expanding central-bank allocations.