Gold prices saw a sharp drop this week, ending one of the most dramatic rallies in years. After hitting an all – time high of $4,381.21 per ounce on Monday, the precious metal tumbled more than 5% on Tuesday as investors rushed to take profits. By early Wednesday, gold traded at around $4,141.48 per ounce, showing only a small recovery of less than 0.4%.
The sell-off followed weeks of heavy buying that had pushed gold prices to overheated levels. Experts say this sudden drop marks the biggest single-day decline in over a decade, with similar trends seen in silver and platinum, which fell by 7% and 5% respectively.
Gold has been on a remarkable run in 2025, soaring more than 50% amid growing global uncertainty. Investors turned to gold as a safe asset during times of political tension, high US debt, and expectations of possible interest rate cuts by the Federal Reserve. In just the last two months , prices climbed nearly 25%, driven by strong demand.
However, positive signs of trade talks between the United States and China led many investors to lock in their profits. A stronger US dollar also added pressure, pulling gold prices lower. The upcoming meeting between President Donald Trump and Chinese President Xi Jinping has further boosted investor confidence that trade tensions may ease soon.
Adding to the decline, physical demand for gold slowed down following the end of India’s Diwali festival, traditionally one of the world’s biggest gold-buying seasons. Analysts believe these combined factors created the perfect setup for a market correction after weeks of record highs.
While gold remains a long-term favorite for investors seeking safety, its recent swing highlights how quickly market trends can change. For now, traders are watching closely to see whether prices stabilize or if further declines are on the way.
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