October 22, 2025 | New York – Gold prices plunged on Tuesday (October 21), marking their largest single-day decline in nearly five years, as investors took profits following the previous session’s record-breaking rally fueled by expectations of U.S. interest rate cuts and strong safe-haven demand.
Spot gold dropped 5.5% to USD 4,115.26 per ounce, reaching a one-week low and recording its steepest daily fall since August 2020. Meanwhile, U.S. gold futures for December delivery closed down 5.7% at USD 4,109.10 per ounce.
The sharp correction came just a day after gold prices hit an all-time high of USD 4,381.21 on Monday (October 20). The precious metal has surged about 60% since the start of the year, driven by ongoing geopolitical tensions, economic uncertainty, expectations of rate cuts, and strong central bank purchases worldwide.
“Until yesterday, investors continued to buy on dips,” said Tai Wong, an independent metals trader. “However, the recent volatility at elevated price levels served as a warning, prompting many to lock in short-term profits.”
Adding pressure to the market, the U.S. dollar index rose 0.4%, making gold more expensive for investors using other currencies.
According to Jim Wyckoff, senior analyst at Kitco Metals, “Improved risk appetite at the start of this week is weighing on safe-haven assets like gold and silver.”
In a separate note, Citi analysts said they expect the U.S. government shutdown to end soon, alongside progress in a U.S.–China trade agreement, which could push gold into a consolidation phase over the next few weeks.
Market participants are now watching closely for the release of the U.S. Consumer Price Index (CPI) report for September, scheduled for Friday (October 24). The report—delayed by the shutdown—is projected to show annual inflation at around 3.1%, with investors largely anticipating a 25-basis-point interest rate cut by the Federal Reserve at its upcoming policy meeting.