Gold prices have seen their sharpest fall since 2013 – Here is the reason

2025-10-22 01:48:22

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Gold prices fell more than 5% on Tuesday, marking the largest one-day drop in over a decade, triggering a sell-off in the precious metals market. The main reason is investors taking profit after a record buying period, while the market is undergoing a “technical adjustment” due to the rapid increase earlier.

Gold futures fell 5.2% to around 4,130 USD/ounce, having previously plummeted by 6.3%. Similarly, silver and platinum contracts – which have risen 60% and 66% this year – also fell sharply, down 7.2% and 8% respectively, with silver priced at 47.45 USD/ounce. Expert Suki Cooper (Standard Chartered) noted that the sell-off is normal after the precious metals surged.

Gold prices have had the largest fall in the last 10 years | Source: TradingViewAnother factor affecting this is the strong USD, making gold more expensive for international investors; the USD index rose by 0.4% on Tuesday. Bart Melek, Global Head of Commodity Strategy at TD Securities, stated that traders are also taking profit after a strong rally.

In addition, some analysts believe that the recent signing of an agreement between the U.S. and Australia regarding rare earths has fostered optimism about the possibility of a new trade agreement between the U.S. and China, causing investors to sell off safe assets.

Despite a sharp short-term fall, the long-term outlook remains positive. Bank of America has raised its gold price target to 5,000 USD/ounce by 2026, while HSBC predicts gold will reach 3,950 USD in 2025, and silver prices are also expected to rise but with strong fluctuations. This year's strong increase is driven by economic and policy instability, such as President Donald Trump's taxes and inflation. Gold and silver remain safe havens, while platinum rises due to demand in the jewelry and automotive industries.

Experts evaluate that gold prices, which have increased by 25% over the past two months, are now entering a correction phase. Nicky Shiels commented that the “bubble” of excessive buying is deflating, and the upward momentum has matured. She said: “The price increased by up to 1,000 USD in just 6 weeks, indicating an excessive rise; we are currently at an extremely high ( 'stratosphere' ).”

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