Asian Markets Mixed as Gold Stabilizes After Record Selloff

Investors eye pullback as equities consolidate; gold steadies near $4,120 amid data void and technical correction

Asian stocks opened on a mixed note Wednesday, with Japan set for modest gains while Hong Kong and Australia drifted lower, as markets absorbed a sharp reversal in precious metals and signs of fatigue in the recent US equity rally.

After surging to record highs earlier this month, gold plunged 5.3% on Tuesday, marking its steepest single-day drop in over five years, while silver tumbled 7.1%. The selloff was driven by overextended technicals, a stronger US dollar, and uncertainty stemming from the prolonged US government shutdown, which has deprived traders of key positioning data.

Despite the turmoil, spot gold steadied at US$4,126 an ounce in early Asia trading, while silver inched slightly lower. Analysts at ANZ said that heavy long positioning likely amplified the correction but stressed that long-term fundamentals — including falling yields and central bank demand — remain supportive.

“Markets rarely move in straight lines,” said Fawad Razaqzada of City Index. “This pullback looks like a technical reset rather than the end of the bull run. Many investors who missed the rally may now step in to buy the dip.”

Equities: Consolidation Phase Ahead

US stocks closed largely flat overnight, with the S&P 500 unchanged and the Nasdaq showing signs of buyer exhaustion after weeks of gains. Barclays noted that stock exposure among global macro funds remains at a one-year high, suggesting limited upside in the near term.

Craig Johnson of Piper Sandler expects short-term weakness:

“Our near-term technical outlook is for equities to consolidate or pull back over the next few weeks. We view pullbacks as healthy and necessary.”

Asian equity futures reflected that sentiment — Nikkei 225 futures rose 0.5%, while S&P/ASX 200 futures dropped 0.5% and Hang Seng futures fell 0.4%.

Macro Backdrop: Shutdown, Trade Hopes, and Oil Moves

The US government shutdown, now nearing the record for length, has created an economic data vacuum that has left investors guessing about fundamentals. Still, equity drawdowns have remained shallow as investors use dips to re-enter the market.

On the geopolitical front, optimism over US-China trade talks helped ease fears, contributing to the gold correction. Meanwhile, oil prices extended gains for a second session after President Trump said India would wind down oil imports from Russia, following conversations with Prime Minister Modi.

Currencies and Bonds

The Bloomberg Dollar Spot Index rose 0.3%, while 10-year Treasury yields slipped two basis points to 3.96%, reflecting safe-haven demand. Australia’s 10-year yield held steady at 4.11%.

Crypto and Commodities

Bitcoin dipped 0.2% to US$110,596, while Ether slid 0.4% to US$3,942.

Despite the recent volatility, analysts say gold’s multi-month uptrend remains intact — supported by lower yields, resilient central bank buying, and investor caution over global trade and credit conditions.

“Wild swings often follow big rallies,” said Matt Maley of Miller Tabak. “This could mark a meaningful pullback, not the end of the bull market — but traders should expect higher volatility ahead.”

Market snapshot (as of 7:18am Tokyo time)

• Hang Seng futures: -0.4%

• S&P/ASX 200 futures: -0.5%

• Nikkei 225 futures: +0.5%

• Gold: US$4,126.22/oz (steady)

• 10-year Treasury yield: 3.96%

• Bitcoin: US$110,596 (-0.2%)

Bottom line: The market’s short-term tone is cautious. Gold is stabilizing after a historic selloff, equities are consolidating, and investors appear content to wait out the shutdown before taking major positions.