publication
2025-10-21 21:16
After weeks of crazy increases, we finally saw an equally sharp correction in the precious metals markets. On Tuesday, gold fell by more than 5%, and the prices of silver, palladium and platinum fell by more than 7%.
At 21:13 Polish time, the most active series of New York gold futures contracts was down nearly 5.5%, reaching USD 4,121.14 per troy ounce. In nominal terms, this meant a discount of as much as USD 238 per ounce. Such a strong daily decline in gold prices has not been seen since the fateful crash of April 2013.
Other precious metals fell even more. The silver price dropped by 7.4%, falling to USD 47.56/oz. Platinum prices dropped by 7.5% and palladium prices dropped by 7.35%.
*SPOT SILVER FALLS AS MUCH AS 8.7% IN BIGGEST DROP SINCE 2021
*SPOT GOLD FALLS 6.3% IN BIGGEST ONE-DAY DROP SINCE APRIL 2013
— zerohedge (@zerohedge) October 21, 2025
However, it is worth keeping in mind that such sharp declines took place after very strong increases recorded, especially in the last dozen or so weeks. Over the last two months, gold prices have gone up from almost USD 3,400 to almost USD 4,400/oz, causing a real “gold rush”. In many countries around the world, retail investors lined up in long lines to buy the royal metal.
– The last few weeks have been a roller-coaster ride, considering that we are talking about an asset whose capitalization in terms of the mined metal is USD 29.5 trillion.more than the valuation of Nvidia ($4.4 trillion), Microsoft ($3.8 trillion), Apple ($3.7 trillion), Google ($3 trillion), Amazon ($2.3 trillion), Facebook ($1.8 trillion), all silver ($2.9 trillion) and all cryptocurrencies ($3.8 trillion) combined – my editorial colleague Michał Kubicki wrote last week.
Once again, this type of pictures preceded sudden declines in the panic-bought value. A lot of air has escaped from this “gold rush” today. Even if we are still in the midst of a secular bull market in precious metals, these types of corrections will continue to happen and are generally a sign of healthy market functioning.
– In previous days, such discounts in gold prices were bought by investors. But a sharp increase in volatility over the past week has increased caution and could trigger short-term profit-taking, Tai Wong, an independent precious metals trader, told Reuters.
It is also worth keeping in mind that even after Tuesday's depreciation, gold in dollar terms is still over 56% more expensive than at the beginning of the year and this would still be the highest annual rate of return in 46 years. The temptation to take profits by those investors who have been taking long positions for months or even years was (and still is!) equally high. Silver seems to be even more exposed to further declines, as it is still up 63% since the beginning of January.
Let's add to this that the reasons why many investors have been buying gold in recent months or even years have not changed today. We still live in an overly indebted world, where just servicing this debt (i.e. interest repayment and rollover of the principal amount) will probably require higher inflation in the coming years – especially in developed countries. Let's add to this the distrust of the policies of successive US governments (which are increasingly using economic and financial sanctions as a tool to influence other countries) and the decreasing confidence in the actual independence of central banks. This is why investors believe less and less in the dollar and other fiat currencies, increasing the share of gold in their portfolios just to be on the safe side.
These long-term “foundations” have not changed on October 21, 2025. However, this does not rule out a scenario in which we will see further – and perhaps even equally sudden – declines in gold and silver prices in the short term. Now investors with a time horizon of weeks and months, not years or decades, are simply exiting the market.
