- By Ajeet Kumar
- Sat, 25 Oct 2025 11:15 AM (IST)
- Source:JND
Gold Price Crash: Less than a day after gold soared to another record high, prices for the precious metal plunged, marking the biggest sell-off in years. Gold futures in New York closed at a record $4,374 per troy ounce on Monday, before falling more than $250 (or 5.74 per cent) on Tuesday.
That’s the largest, single-day percentage drop seen since September 2011, according to data in FactSet. And despite some brief rebounds, losses continued to pile up Wednesday — with gold futures trading at about $4,036 as of 11 am ET.
Here’s what we know.
Why have gold prices surged to a record high?
Prices are still up since the start of 2025. Gold sales often rise sharply amid wider economic uncertainty, as anxious investors seek a “safe haven” for their money. More have turned to gold amid US President Donald Trump’s barrage of tariffs on imports from around the world, rising concerns about inflation and the now weekslong US government shutdown.
And even before that, geopolitical tensions and strong demand from central banks bolstered gold’s gains over recent years. But precious metals can be volatile — so it’s not uncommon for gold to see day-to-day fluctuations in value.
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What analysts say about gold price surge
Some analysts say this week’s pullback was triggered by hopes of cooling trade tensions between the US and China, for example. Meanwhile, criticism had already been growing that gold’s price had gone too far, too fast. Others speculate there could be a broader correction.
(CREDIT: REUTERS)
Why have gold prices tumbled from record highs?
No investment’s price consistently goes up forever, and some fluctuation isn’t surprising after such meteoric rises.
“Why precious metals sold off yesterday — and whether this is the beginning of a broader correction — remains to be seen,” Ipek Ozkardeskaya, a senior analyst at Swissquote, wrote in a Wednesday note.
(CREDIT: REUTERS)
Ozkardeskaya said Tuesday’s losses were “triggered by hopes of easing trade tensions between the US and China and a rebound in the US dollar.” Still, she noted that the future is far from guaranteed, and many of the same factors that drew buyers to gold this year remain.
“What probably better explained yesterday’s precious metals sell-off was mainly the fact that the metals are now trading in deeply overbought market conditions with heightened volatility,” she added, noting that further price pullback is possible.
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Again, despite this week’s losses, gold futures are still up 50 per cent overall since the start of 2025. And silver has climbed even higher, up 60 per cent year to date.
Is gold worth the investment?
Advocates of investing in gold call it a safe haven, arguing that the commodity can serve to diversify and balance your investment portfolio, as well as mitigate possible risks down the road as a hedge against rising inflation. Some also take comfort in buying something tangible that has the potential to increase in value over time.
(CREDIT: REUTERS)
Still, experts caution against putting all your eggs in one basket. Not everyone agrees that gold is a good investment. Critics say gold isn’t always the inflation hedge many claim — and that there are more efficient ways to protect against potential loss of capital, such as derivative-based investments.
And again, as seen this week, it’s not common for gold to have day-by-day swings in value.
What is the future of gold investment?
The Commodity Futures Trade Commission has previously warned people to be wary of investing in gold. Precious metals can be highly volatile, and prices rise as demand goes up, meaning “when economic anxiety or instability is high, the people who typically profit from precious metals are the sellers,” the commission noted.
(With inputs from PTI)