Analysis: Gold has seen its largest fall in four years, with Overbought pullback combined with a strong dollar triggering selling.

According to Deep Tide TechFlow news on October 21, as reported by Jin10 data, institutional analysis pointed out that after several weeks of rapid rise leading to technical indicators showing Overbought, the gold price recorded the largest single-day fall in four years.

After reaching a historical high of $4381.52 per ounce on Monday, gold prices plummeted 3.8% to below $4190 per ounce on Tuesday, with indicators such as the relative strength index showing that the current sharp rise has deeply entered the Overbought zone. The strengthening dollar has made dollar-denominated precious metals more expensive for most buyers.

As trade tensions have eased and the seasonal buying frenzy in India has come to an end, the safe-haven demand for precious metals has cooled. Ole Hansen, a commodity strategist at Saxo Bank, pointed out: “In recent trading days, more and more traders have begun to be wary of the risks of a pullback. The market is demonstrating its true strength in this adjustment, and this time is no exception; underlying buying could limit the decline.”