Gold’s record rally has stalled, with prices extending losses after a sharp six per cent drop — the steepest in more than a decade. Analysts say the pullback follows a lengthy run-up driven by safe-haven demand, central bank buying and macroeconomic uncertainty.
BNN Bloomberg spoke with Carey MacRury, analyst at Canaccord Genuity, who said the correction looks natural given gold’s strength this year and sees continued long-term support from U.S. debt concerns and ongoing central bank demand.
Key Takeaways
- Gold has fallen more than six per cent, its biggest one-day drop since 2013, after a record-setting rally earlier this month.
- The correction was driven by profit-taking, a stronger U.S. dollar and easing U.S.-China tensions.
- Carey MacRury says gold’s fundamentals remain strong, supported by U.S. debt growth and continued central bank buying.
- The analyst upgraded Franco-Nevada to “buy,” calling royalty companies a safer way to invest in the gold space.
- Gold producers now have stronger balance sheets and lower debt, putting the sector in a healthier position than past cycles.
Read the full transcript below:
LINDSAY: OK, let’s take a look at gold. The price of bullion is under pressure again today after falling more than six per cent yesterday, which was the worst decline since 2013. That drop was driven by profit-taking after a lengthy rally, an easing of U.S.-China relations and a stronger U.S. dollar. For more on gold, we’re going to bring in Carey MacRury, analyst at Canaccord Genuity. It’s good to have you join us. Thanks for taking the time.
CAREY: Thanks for having me.
LINDSAY: So gold prices hit a record high on Monday, then we saw that really dramatic drop yesterday. As I mentioned, it’s not just one factor. What are you looking at when it comes to what we’ve been seeing with gold over the last 24 hours?
CAREY: I think it’s important to keep in mind that gold has been extremely strong this year. We only hit $4,000 an ounce, literally, two weeks ago. Even with the pullback, gold is up more than 50 per cent year to date, and that’s the best year for gold since 1979. After a really strong run — particularly in October, when gold was up almost $500 an ounce — I think it’s just a natural pullback here.
LINDSAY: So do you think what we’re seeing right now — the pullback — is short term?
CAREY: We think short term. If you look at the fundamentals for gold, we think they’re still strong. You’ve got the Fed cutting interest rates, you’ve got a slowing labour market — obviously with not a lot of data — the Fed is sort of flying blind right now. You look at the U.S. debt level: it’s at $38 trillion and climbing at $2 trillion a year. Deficits of six to seven per cent in a growing economy are literally unheard of. So I think there are a lot of macro factors. Then, ultimately, central banks. Central banks continue to buy gold at record levels. If you think about the assets that central banks hold, they hold about $16 trillion worth of assets, and gold’s share is increasing and the U.S. dollar’s share is decreasing. So we think all those factors are still in place, and we think they ultimately take gold higher.
LINDSAY: I’ve heard some analysts say there’s a bit of a bubble in gold — that it’s been getting larger and has finally popped. You don’t see it that way?
CAREY: I don’t see it that way. To put it in context, gold was $35 an ounce in 1971, $250 an ounce in 2000, and here we are at $4,700 per ounce. At the end of the day, the supply of gold is very slow. Mining is very difficult. The supply of gold increases by about 1.5 per cent a year, and that’s been the rate for 50-plus years. The supply of dollars goes up by six to eight per cent per year. So in the long run, it’s gold versus dollars, and we think gold goes up in the long run. We talk about bubbles. Is $38 trillion of debt getting any smaller? It’s not, and it’s growing at $2 trillion a year. That debt number is up 50 per cent since the end of 2019. Gold is rising in response to these factors, and we don’t see them subsiding any time soon.
LINDSAY: And on that note, you did raise your rating on Franco-Nevada, which is basically a gold investment company. You raised that from hold to buy. Can you tell us more about why you did that?
CAREY: Franco-Nevada is a royalty company. As a royalty company, it’s generally a safer way to invest in the gold space. They don’t operate any mines; they own a percentage of the top-line revenue. It’s one of the best royalty and streaming companies out there. We took advantage of this pullback — the valuation is more reasonable here. We upgraded what is a high-quality stock that has a great track record of growing its share price value.
LINDSAY: Is that what you think investors should be doing right now, now that there’s a bit of a drop? As you say, you took advantage of it to buy a little bit more. Obviously it depends on the company, but is that something investors should keep in mind as a strategy?
CAREY: That’s a good question. For investors who want to be defensive — and certainly after a big pullback it’s natural to be defensive — the royalty names are a classic place to be. You don’t take on a lot of capital risk and operating risk, so they tend to be less leveraged to gold, but over the long term they’ve performed very well.
LINDSAY: Are there any companies, when we’re talking about gold or even just precious metals, that you’re cautious of?
CAREY: I would say no. If you think about the last cycle — 2000 to 2011 — even in a year of record prices like 2011, companies were spending more than they were making and were accumulating debt. If you look at the market today, companies have good balance sheets. They’re paying down debt and making lots of free cash flow. So fundamentally, the sector is in a much different place today. I’ll give you an example: Agnico Eagle. They’re one of the best-quality operators out there. They have an $80-billion market cap and only about $600 million of debt. They’ve been paying down debt, and they’re making $5 billion a year of free cash flow. So here’s a company that’s paying down debt, paying a dividend, buying back stock and still generating cash. The sector is in a much better place, so we don’t really have any outright negative views here.
LINDSAY: On that note of Agnico Eagle — one of the big ones on the TSX that was dragged down yesterday with the price of gold slipping so much — what are your thoughts on how the TSX has been affected by this drop?
CAREY: If you look at the gold sector as a percentage of the TSX, I think the average is something like eight to 10 per cent, and given the strength this year it’s now pushed up to high levels. It’s around 14 per cent, and it’s been as low as six per cent. So gold as a percentage of the TSX is as high as it’s ever been. We think it can still go higher. At the end of the day, the gold industry is a global industry. It’s not necessarily tied to Canadian fundamentals, but certainly money managers who are managing Canadian money need to pay attention to the gold space.
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This BNN Bloomberg summary and transcript of the Oct. 22, 2025 interview with Carey MacRury are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
