Gold Plunges over 6%, Marking Biggest Single-Day Drop Since April 2013
NEW YORK – Gold prices experienced a dramatic decline today, falling as much as 6.3% during intraday trading – the largest single-session drop as April 2013. The precious metal, which recently hit a record high, traded as low as $4,082.03 per ounce.If the losses hold through the close of trading, it will represent the steepest decline as August 11, 2020, when gold lost 5.69%.
The sharp downturn follows a period of important gains for gold, which has risen 57% year-to-date, culminating in a peak of $4,379.93 per ounce last Friday. The sell-off is attributed to a confluence of factors,including easing demand for safe-haven assets as trade talks between the U.S. and China approach, the conclusion of seasonal purchases in India, and a strengthening U.S. dollar. This price correction impacts investors holding gold as well as the broader precious metals market, with silver also falling sharply, down 7.5% to around $48.5 per ounce.
Market analyst Manuel Pinto of RPP noted the decline is linked to “demand for safe haven precious metals has cooled a bit, as US President Donald Trump and China’s Xi Jinping meet next week to resolve their trade differences.” He also pointed to the end of “a wave of seasonal purchases in India” triggering “a wave of selling in gold.”
Further contributing to the downward pressure, according to Pinto, is “the strengthening of the dollar, which has made precious metals more expensive for global buyers, and the uncertainty about investor positioning due to the US government shutdown.” Axel Botte, head of market strategies at Ostrum AM, suggested that some market participants believe the recent surge in gold prices had become unsustainable.
