TLDR
- Gold experienced its largest single-day drop in over 12 years on October 21, falling more than 6% after hitting a record high of $4,381 per ounce on Monday
- The precious metal lost approximately $2.1 trillion in market capitalization in one day, falling to around $4,129 per ounce
- Bitcoin gained 0.51% during the same period, trading at $108,491, leading analysts to suggest capital rotation from gold to crypto
- The gold selloff followed weeks of heavy buying that pushed prices to overheated levels, with the metal gaining over 50% in 2025
- Renewed optimism over US-China trade talks and profit-taking after the Diwali festival in India contributed to gold’s decline
Gold suffered its steepest one-day price decline in more than a decade on Tuesday. The precious metal fell over 6% after reaching an all-time high just one day earlier.
On Monday, gold hit a record price of $4,381 per ounce. By Tuesday, spot gold tumbled as much as 6.3% to $4,082.03 per troy ounce. US gold futures settled down 5.7% at $4,087.70.
The drop marked the sharpest percentage decline since April 2013. At press time, gold was trading at approximately $4,129 per ounce. The selloff erased roughly $2.1 trillion in market capitalization in a single day.
Silver and platinum also fell sharply on Tuesday. Silver dropped 7% while platinum declined 5%. All three metals had been riding a wave of strong demand in recent weeks.
Gold had surged 25% in just the past two months. The rally was driven by concerns over US government debt and political uncertainty. Speculation about Federal Reserve interest rate cuts also fueled buying.
Bitcoin Gains as Gold Falls
While gold prices tumbled, Bitcoin moved in the opposite direction. The cryptocurrency rose 0.51% over the 24-hour period. Bitcoin was trading at $108,491 at press time.
Some analysts believe this represents a rotation of capital from gold into Bitcoin. Professional trader Peter Brandt highlighted the scale of gold’s decline. He noted the loss equaled 55% of the entire cryptocurrency market’s value.
Analyst Ash Crypto stated the rotation from gold to Bitcoin has begun. Market research firm Swissblock pointed to similar patterns in April. At that time, gold fell 5% in three days before Bitcoin rallied from its macro bottom.
Anthony Pompliano also commented on the shift between the two assets. He suggested the rotation was starting to take hold. Gold has gained more than 50% in 2025, surpassing rallies seen after September 11, the 2008 financial crisis, and the COVID-19 pandemic.
Trade Talks and Profit Taking
Several factors contributed to gold’s sharp decline. Optimism over easing trade tensions between the US and China played a role. Trade representatives from both countries are expected to meet late this week.
President Donald Trump expressed confidence about reaching a deal. He said he expects to work out something fair with Chinese President Xi Jinping. The two leaders are scheduled to meet next week.
A rebound in the US dollar also prompted investors to take profits. Analysts said the selloff followed weeks of heavy buying that pushed gold to overheated levels. Many investors had rushed to purchase physical gold during the recent rally.
The end of the Diwali festival in India reduced physical demand. India is the world’s second-largest gold consumer. The timing of the festival’s conclusion aligned with the price drop.
On Wednesday, gold prices recovered modestly. The metal was trading at $4,141.48 per troy ounce, up less than 0.4%. Bitcoin maintained its gains from the previous day at $108,491.
