Glitter Fades: Gold’s Sharpest Drop Since 2013 Shakes Markets

Image Source: Times of India

Spot gold prices extended their steep decline on October 21, 2025, falling 5% to $4,136.72 an ounce—the sharpest drop in over a decade. The selloff occurred amid profit-taking after a record-breaking rally and easing geopolitical tensions, signaling a temporary pause in the precious metals rally.

Spot gold prices continued their dramatic downward movement on October 21, 2025, extending losses to close near $4,136 per ounce, representing a 5% decline. This sharp pullback followed an extraordinary nine-week rally during which gold surged to unprecedented highs, peaking above $4,380 just days prior. Market experts suggest that investors engaged in significant profit booking amid rising volatility and a cooling of safe-haven demand.

Key highlights include:

Spot gold's 5% drop marks its steepest single-day decline since 2013, reflecting abrupt corrective trading after consistent price gains this year.
The metal's recent rally was fueled by geopolitical tensions, central bank gold purchasing, and expectations of monetary easing, driving prices up approximately 60% year-to-date.
Factors contributing to the sharp retreat include a stronger US dollar, improved US-China trade relations, and increased appetite for riskier assets in global markets.
Silver prices also experienced a notable drop, plunging 8.7% to $47.89 an ounce—their largest single-day fall since 2021, driven by similar market dynamics.
Analysts warn of potential further corrections if gold fails to reclaim key support levels around $4,100, with $4,000 cited as a critical zone to watch for stability.
Despite short-term setbacks, long-term fundamentals like central banks' accumulated reserves and ongoing economic uncertainties keep gold’s outlook robust.
Investor caution prevails as market watchers anticipate upcoming US Federal Reserve meeting minutes and monitor currency fluctuations that could influence gold’s trajectory.

This market reaction underscores the inherent volatility of precious metals in the face of shifting macroeconomic conditions and geopolitical developments. While the recent price drop may deter short-term investors, gold remains a favored asset for wealth preservation amid global uncertainties. Moving forward, market participants are advised to adopt a measured approach, capitalizing on dips rather than chasing rallies.

Source: Bloomberg News, Reuters, Kitco Metals, Business Today, Mining.com, Financial Express, Economic Times, MoneyControl, Bloomberg Market News.

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