The hot commodity gold appears to be entering a correction phase, pay attention to this key breakout point...

The red-hot gold trade is showing some signs of correction. On Wednesday, gold prices fell for the sixth consecutive trading day, hovering near the two-week low touched in the previous session, as market participants' expectations for a significant rate cut diminished and attention shifted to the Federal Reserve's meeting minutes and inflation data.

StoneX Chief Market Strategist Kathryn Rooney Vera noted, "Gold is fascinating, and I believe people have definitely started to hedge risks, but now the gold rally is starting to look 'too exhausted'. I would also predict that it will experience some corrections and take some profits off the table."

Gold has been one of the best-performing assets this year. So far this year, gold prices have soared by 27%, to over $2600 per ounce. On September 26, gold prices hit a historical high of $2694 per ounce. In comparison, the S&P 500 has risen by 20% this year.

There are many factors driving the surge in gold demand, such as geopolitical and economic instability, which often triggers market demand for safe-haven assets like gold. Additionally, some experts point out that a weaker dollar and the Federal Reserve's inclination to cut rates further support gold prices.

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UBS analyst Giovanni Staunovo said, "The market is currently waiting for the upcoming release of U.S. inflation data. Since last week's non-farm payroll data, the market has been discussing whether we are in a soft landing or no landing scenario."

The Federal Reserve's September policy meeting minutes will be released at 2:00 AM Beijing time on Thursday, and the U.S. Consumer Price Index (CPI) and Producer Price Index (PPI) data will be released on Thursday and Friday, respectively.

OANDA market analyst Zain Vawda said, "A significant increase in inflation could change the current situation for gold. However, considering geopolitical tensions and market uncertainty, we may continue to see gold fluctuate within a range."

However, it is worth noting that one of the potential drivers of gold now seems to have gained an additional one - the popular warehouse-style membership store giant Costco's gold bars are selling well.

Although Costco is known for consumers being able to purchase large quantities of paper products, trash bags, food, and household items, Costco began selling 1-ounce gold bars to its members last fall. Since its launch, the product seems to have performed well, as consumers are looking for the simplest way to access appreciating assets.Costco's Chief Financial Officer stated in the recent earnings call that "the continued strong performance of gold bar sales is a significant driver of this quarter's financial report," and that sales have achieved "double-digit growth." Analysts at Wells Fargo recently estimated that Costco may sell between $100 million and $200 million worth of gold bars per month. Actual sales may be even higher, as Costco only allows purchases by members of its warehouse-style membership stores, with a limit of five bars per member. Gold has been so successful for Costco that the company is now expanding into platinum bars.

Traditionally, physical gold demand has been driven by key financial participants such as central banks, rather than companies like Costco. Rooney Vera said, "We are talking about China, Saudi Arabia, Russia buying gold, but recently, demand has expanded to include price-insensitive buyers who are increasingly reluctant to purchase government bonds and prefer to buy gold."