Gold prices saw a sharp sell-off on Tuesday, October 21, 2025. This led to a huge percentage drop, which is the biggest single-day drop in nearly four years. This major fall brought a sudden halt to the all-time soaring price of gold for the year 2025.
This sudden turn was followed by a span of intense buying. On Monday, October 20, international spot gold prices reached a new record high of $4,381.21 per ounce or rupees 3,84,331.79 per 28.35 grams.
However, on Tuesday, October 21, the gold price witnessed a sharp fall of 4 per cent, wiping out the recent gains, and the price fell drastically to around $4,178 per ounce or rupees 3,66,818.79 per 28.35 grams. The price correction continued till 22 October, and for the moment it is stabilised around $4,100 per ounce or rupees 3,59,970.57 per 28.35 grams.
Why did the price drop suddenly?
Market analysts pointed out the main reasons for the drop in the price of gold.
Profit-taking: After a significant high demand for gold, the prices surged to about 50 per cent and hence many investors who bought gold at a lower price decided to sell off and “cash in” the amount to lock their substantial profits.
Recent toning down of trade tension: Due to the ongoing global trade uncertainty, investors were shifting from equities to gold, considering it as a “safe haven” investment zone. However, on Tuesday, October 21, trade talks between the US. And China saw a positive signal, which eased investors to ease out the fears and hence the demand for gold saw a sharp fall.
This recent volatility in gold came after a year-long surge in the price. Gold’s 2025 fueling up was caused by continuous buying by the central banks around the world, who were diversifying their reserves away from the U.S. dollar.
However, this recent drop in price is viewed as a healthy correction after a major hike. Now, the investors are looking for the next U.S inflation report, which will help them to understand the future interest rates.
