TLDR
- Gold fell 6% on October 21, 2025, marking its steepest decline since November 2020, with prices dropping to around $4,150 per ounce
- The decline came one day after gold reached a record high of $4,381.21, having gained more than 60% year-to-date
- The drop is attributed to profit-taking by investors, a strengthening US dollar, and easing trade tensions between the US and China
- Gold has climbed 28% since mid-August due to central bank purchases and investor inflows into gold-backed ETFs
- Wall Street analysts remain bullish, with Bank of America forecasting gold could reach $6,000 per ounce by mid-2026
Gold prices experienced their largest single-day decline in years on October 21, 2025. The precious metal fell approximately 6% to trade around $4,150 per ounce.
The drop represents the steepest decline for gold since November 2020. This comes just one day after gold reached its latest all-time high of $4,381.21 per ounce.
Gold has gained more than 60% in 2025 as geopolitical uncertainty and economic concerns drove investors toward the safe-haven asset. Both individual investors and central banks increased their purchases of bullion throughout the year.
The recent decline is being attributed to multiple factors. Investors began booking profits after the record-breaking rally. The US dollar index rose 0.4% on October 21, making gold more expensive for holders of other currencies.
Trade tensions between Washington and Beijing have also eased. Technical indicators showed overbought conditions for the precious metal.
David Morrison, senior market analyst at Trade Nation, noted that gold attempted to push above $4,400 multiple times starting last Thursday. Each attempt met resistance at that level.
Recent Rally and Market Dynamics
Gold has climbed 28% since mid-August. This surge was driven by central bank purchases and increased inflows into gold-backed exchange-traded funds.
Investors piled into the metal as a hedge against trade tensions. The movement away from fiat currencies also contributed to the rally.
The SPDR Gold Shares ETF, which tracks spot price movements of bullion, has risen 27.54% in the last three months. Geopolitical uncertainty and market risks fueled this growth.
The US dollar weakened earlier in 2025, which helped push gold prices higher. Investors shifted capital into gold as the greenback lost value.
However, the dollar could strengthen as interest rates are expected to move lower in coming months. The Federal Reserve is anticipated to cut interest rates by another 25 basis points on October 29.
Future Outlook and Key Tests
A key test for gold prices will come with the US inflation report on October 24. The September inflation report was delayed due to a US government shutdown.
Analysts expect the report to show a 3.1% year-over-year rise in consumer prices. Any worse reading could send investors back into gold.
Tom Essaye, founder of Sevens Report Research, described the current decline as “just a bump in the road.” He pointed to elevated inflation, low real interest rates, geopolitical concerns, and US government dysfunction as factors supporting gold prices.
Morrison identified $4,000 as the first major downside test for gold prices. He also suggested buyers could return around the $4,200 level.
Wall Street analysts remain bullish on gold heading into 2026. Bank of America analysts reiterated their “long gold” recommendation and forecast a $6,000 per ounce peak by mid-2026.
Goldman Sachs raised its gold price target to $4,900 per troy ounce by the end of 2026. This is up from their prior prediction of $4,300.
JPMorgan analysts predict gold could reach $6,000 per ounce by 2029. Silver futures also tumbled around 7% on October 21, marking their largest drop in more than four years.
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