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2025-10-21 22:58:11
Spot gold plunges 6%, its biggest drop in over 12 years; analysts warn of bubble risks. According to the Financial Times, gold prices plummeted 6% on Tuesday, its biggest single-day drop since April 2013. The historic gold rally paused as India's Diwali gold-buying season came to a halt. After hitting a high of $4,381 per ounce on Monday, gold prices plummeted to $4,082 on Tuesday, a move widely seen as a belated correction. This year's historic rally has accelerated in recent weeks, with gains reaching 25% in the past two months alone. Nicky Shiels, head of metals strategy at MKS PAMP SA, said: "The market is showing signs of a bubble, primarily due to extreme overbought conditions – the rally is peaking. The $1,000 surge in six weeks suggests that gold prices are overvalued and we are at irrationally high levels." Analysts point to the recent rebound in the US dollar and the lack of futures market position data due to the US government shutdown as contributing to the sharpest gold price drop since 2013.
