Gold prices experienced a significant drop on Tuesday, marking the largest decline in over a decade as traders decided to lock in profits after a record-breaking nine-week rise.
The price of spot gold fell to $4,090.97 per ounce, a drop of nearly $300 from the previous day’s peak of $4,380.89. In New York, US gold futures slipped 5.4%, hovering around $4,100 an ounce.
This nearly 6% decrease represents the most substantial intraday decline since 2013, a time when gold was valued at under $2,000 an ounce. Since that period, its price has more than doubled, largely driven by escalating geopolitical tensions and central banks increasingly acquiring gold.
As the value of gold continues to rise, major banks and analysts are adjusting their predictions upward. They foresee that the increasing geopolitical and economic uncertainties will keep pushing demand and prices higher. For instance, HSBC has set ambitious targets, suggesting gold could hit $5,000 an ounce by next year.
Profit-Taking
However, gold investors might need a bit of patience. The precious metal has surged rapidly, with little time for adjustment.
“There was some bullish buying in gold until yesterday, but the sudden increase in volatility seen at recent highs is a red flag and could trigger some immediate profit-taking,” said Tai Wong, an independent metals trader.
With US-China trade tensions seemingly easing as both nations aim for an agreement ahead of the November 1 tariff deadline, gold’s downturn coincides with a reduced demand for safe-haven assets.
“Earlier this week, the overall improved market appetite is negative for safe-haven metals,” observed Jim Wyckoff, senior analyst at Kitco Metals.
Despite Tuesday’s sharp decline, gold remains one of the top-performing commodities of 2025, having doubled in value over the year so far.
Deadline for Correction
“Traders have become increasingly cautious in recent sessions with rising concerns about market corrections and consolidation,” said Ole Hansen, commodity strategist at Saxo Bank.
“During corrections, we often see a market’s true strength emerge, and this case is no different; demand should limit any rebounds,” he added.
Ongoing US government shutdowns have deprived commodity traders of key information, such as the Commodity Futures Trading Commission’s weekly report detailing how hedge funds and other money managers are positioned in gold and silver futures.
Consequently, there has been an increase in volatility among precious metals, as traders look to hedge against potential declines in other areas of their portfolios or capitalize on falling prices. Over 2 million options related to the world’s largest exchange-traded fund (ETF) were traded between Thursday and Friday last week, surpassing all previous records.
“The lack of data comes at a critical juncture, with speculative long positions in both metals likely to rise, making them more vulnerable to corrections,” Hansen noted.
Gold Miners Decline
The downturn in gold prices significantly affected mining stocks as well. The VanEck Gold Miners ETF, the largest fund comprised of gold mining companies, dropped by double digits, reaching its lowest level in a month.
Looking at individual companies, shares of Newmont and Agnico Eagle Mines, two of the largest mining firms by market capitalization, each fell roughly 9% in New York. Other streaming companies like Wheaton Precious Metals also faced similar declines.
