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Data: FactSet; Chart: Axios Visuals

Gold fell by 2% on Tuesday with some ETFs seeing prices decline by 5% or more as investors took profits on the precious metal after a rally that has pushed gold to record highs near $2,100 per troy ounce.

Why it matters: It was the third straight session that gold fell, the longest losing streak since June, after seven days of appreciation, and the worst selloff since 2013.

What they're saying: “The scale of the upswing over the past four weeks has been excessive. ... Sentiment towards gold became positive in the extreme, with only a minority of participants sounding a note of caution,” Commerzbank analyst Carsten Fritsch wrote in a note to clients.

  • “The price rise was almost solely attributable to robust investor demand, with all other demand components playing hardly any role."

Be smart: U.S. Treasury yields also spiked on Tuesday, with yields on the benchmark 10-year note up by the most since June, reducing the attractiveness of gold, which does not pay a dividend or interest.

  • The unexpected rise in PPI also hurt gold prices, as it could imply higher U.S. interest rates in the future, analysts said.

Of note: Silver retreated by nearly 5% with silver-backed ETFs down more than 10%.

The big picture: “The long-term outlook for gold and silver remains positive, however," Commerzbank's Fritsch said. "Prices are likely to begin rising again as soon as the current correction has finished.”

  • In fact, analysts expect the declines to attract more buyers looking to buy the dip, as happened in March when gold swooned with the stock market, dropping 28%, only to gain 149% between March 18 and Monday.

Yes, but: "The risk to this view is that we could now be entering a period of wider swings in the gold price, akin to 2011-12, which would be suggestive of a more mature phase in the bull cycle and consistent with the 'accelerated aging' hypothesis," Marc Chandler, chief market strategist at Bannockburn Global Forex, said in a note.

  • The rally also will be dependent on the Fed remaining aggressive in keeping rates down, the dollar continuing to fall and inflation expectations recovering, he added.

Go deeper

Ben Geman, author of Generate
Oct 12, 2020 - Energy & Environment

Oil's chilly season

Data: Federal Reserve Bank of Kansas City; Chart: Axios Visuals

Oil prices can't seem to reach escape velocity, spelling more pain for producers as the COVID-19 pandemic continues to weigh on demand.

Why it matters: The chart above provides a glimpse at why prices remain too low to pull the U.S. sector — which is seeing rising bankruptcies — out of jeopardy.

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Mike Elliott has moved swiftly after the death of Daunte Wright. Photo: Kerem Yucel/AFP via Getty Images)

The killing of Daunte Wright by a Brooklyn Center, Minn., police officer has thrust Mayor Mike Elliott into the national spotlight.

The big picture: Elliott, with the backing of the city council, has acted quickly and boldly in the wake of the shooting. He fired longtime city manager Curt Boganey, took control of the police department and called for the firing of officer Kim Potter, who resigned on Tuesday.

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Members of the Problem Solvers Caucus discuss the COVID-19 relief bill in December. Photo: Oliver Contreras/Bloomberg via Getty Images

Top White House officials will meet Wednesday with a bipartisan coalition of House lawmakers as the administration tries to enlist moderates to support the president's infrastructure proposal.

Why it matters: The meeting is something of an olive branch after President Biden's team courted groups of progressives to back the $2.2 trillion package.