New York: Gold prices tumbled sharply on Tuesday, marking their biggest one-day drop in five years. The sudden fall came as the U.S. dollar strengthened and investors rushed to take profits after the precious metal hit an all-time high just a day earlier.
Spot gold slipped 5.5% to $4,115.83 per ounce by 10:51 a.m. EDT (1451 GMT), touching a one-week low. That’s the steepest decline since August 2020. U.S. gold futures for December delivery also slid 5.3% to $4,129.20 per ounce.
Gold had touched a record peak of $4,381.21 on Monday, capping a massive 60% gain this year. The surge was driven by uncertainty in global politics and economics, growing expectations of U.S. interest rate cuts, and strong buying by central banks.
“Gold dips were being bought as recently as yesterday, but the sudden rise in volatility has made traders cautious,” said Tai Wong, an independent metals trader. “We’re now seeing some short-term profit-taking.”
Meanwhile, the U.S. dollar index rose 0.4%, making gold more expensive for investors using other currencies.
On Wall Street, markets appeared calmer. Futures trimmed earlier losses as investors reacted to mostly positive corporate earnings reports.
“Better risk appetite across markets early this week is negative for safe-haven metals like gold,” noted Jim Wyckoff, senior analyst at Kitco Metals.
Silver, Platinum, and Palladium Also Plunge
Silver took a heavy hit, dropping 8.4% to $48.06 per ounce. “Silver is stumbling badly today and has dragged the entire metals complex lower,” Wong added. He said silver had likely formed a short-term top around $54 and might now trade sideways with volatility.
Platinum fell 7% to $1,523.30, while palladium slipped 6.6% to $1,398.
All Eyes on U.S. Inflation and Trump–Xi Meeting
Traders are now waiting for Friday’s release of the U.S. Consumer Price Index (CPI) report for September. The report was delayed because of the ongoing U.S. government shutdown and is expected to show a 3.1% year-on-year rise.
Markets widely expect the Federal Reserve to cut interest rates by 25 basis points at its meeting next week. Lower interest rates tend to favor gold, which is a non-yielding asset.
Investors are also watching the upcoming meeting between U.S. President Donald Trump and Chinese President Xi Jinping, scheduled for next week in South Korea, as it could influence global trade and economic sentiment.
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