Gold surged to a fresh record of $5,594.82 per ounce on Jan. 29 before reversing sharply in a dramatic intraday sell-off.
The sudden drop saw gold plunge by around 10% within hours, wiping out trillions of dollars in market value.
The move marked the first major break in an almost uninterrupted rally that had pushed gold far beyond earlier forecasts.
Analysts said the sell-off was driven by heavy profit-taking after months of strong gains.
Some market watchers also pointed to shifting geopolitical signals and changing currency expectations.
Despite the sharp fall, gold remains up close to 30% so far in 2026.
Central bank buying has continued to support gold prices even after the correction.
Critics have warned that gold’s rapid ascent showed signs of speculative excess.
“While parabolic moves often take asset prices higher than most investors would think possible, these out-of-the-world spikes tend to occur at the end of a cycle,”
Cathie Wood said.
“In our view, the bubble today is not in AI, but in gold,”
Cathie Wood added.
Gold later stabilised near $5,109.62 per ounce following the comments.
Bitcoin has moved in the opposite direction during the same period.
The cryptocurrency slipped below $82,000 on Jan. 30 amid rising tensions in the Middle East.
The decline put bitcoin on track to finish January in negative territory.
This divergence has challenged the long-held narrative of bitcoin as “digital gold”.
Analysts noted that bitcoin has recently traded more like a risk asset than a safe haven.
Since 2022, bitcoin has still gained roughly 92%, compared with gold’s 20% increase.
Bitcoin’s market capitalisation remains about one-tenth the size of gold’s, highlighting long-term growth potential.
Political developments have played a larger role in bitcoin price action over the past year.
Statements on tariffs and a potential strategic bitcoin reserve have driven short-term volatility.
Some analysts believe capital has rotated towards gold as a more familiar hedge during trade disputes.
“While gold may dominate during acute uncertainty, bitcoin’s distinct supply dynamics and expanding institutional adoption suggest its long-term investment case remains intact,”