Gold has yet to demonstrate a continuous series of gains for 10 weeks, a record that remains unmatched, as the market failed to recover after a colossal sell-off on Tuesday. The price of the metal plummeted by more than 5%, marking its most significant decline in five years. Nonetheless, the precious metal stabilized above the key support level of $4000.

In the face of extreme market volatility, it is hard to believe that we have already hit a bottom for gold. Experts estimate that the market may need time to regain balance.

However, even if gold faces a more serious technical correction, investors should ask themselves: what has fundamentally changed in the market?

In recent weeks, gold has become an impulsive asset as traders have finally begun to join the trend. Record interest in ETFs and unprecedented trading volume in small futures contracts on the Chicago Mercantile Exchange (CME) are clear indicators that retail investors played a crucial role in the recent $ 1,000 rally in gold. Such a speculative boom couldn't sustain itself.

Yet, looking beyond short-term turbulence, even before reaching its parabolic price peak, the gold market had shown its best annual growth since 1979. This is not coincidental. The fundamental value of the yellow metal has already been established and is unlikely to change in the near future.

For example, last week, the U.S. national debt exceeded $38 trillion. This is not just a record; it represents the fastest accumulation of $1 trillion outside of the COVID-19 pandemic period. Just in August, the debt stood at $37 trillion. Some experts highlight that the growth rate of U.S. debt is now twice what it was in 2000.

The debt issue is compounded by the ongoing government shutdown, which is already affecting economic activity.

The fact is that the rising national debt will continue to pressure the economy and contribute to inflation. Investors are increasingly realizing that gold remains one of the few assets capable of protecting their purchasing power under such conditions.

But the United States' debt problems are not unique. National debt around the world continues to rise at a dangerously steep trajectory, which is a primary reason for gold's record highs relative to all major currencies this year.

Looking ahead, further market instability is to be expected. However, many experts note that even at $ 4,000 per ounce, gold remains attractive compared to other assets, such as U.S. stocks, which continue to trade at historical highs.

Many analysts predict that in such an uncertain environment, interest in gold will decrease. But if price dynamics follow a three-year upward trend, it's reasonable to assume that the sell-off will be relatively short-lived and shallow. The weekly decline ranks among the five largest corrections, second only to the May crash. Volatility has made this period challenging, but gold holders should remain calm.

From a technical perspective, oscillators on the daily chart are positive and have exited the overbought zone. However, the fact that prices have fallen below the 9-day EMA suggests the bullish trend has weakened.

Nonetheless, prices have maintained the important level of $4100 for three days, continuing to support the bulls. If prices fall below the round $4000 level, the likelihood of a deeper price decline will increase.