Gold prices fell sharply on Tuesday after hitting record highs the previous day, as investors rushed to take profits, triggering a sudden and steep sell-off that surprised many who had expected the precious metal’s rally to continue.

Gold recorded its worst single-day decline since 2013, dropping about 6.3% in one session — one of the largest daily moves in the precious metals market over the past decade. Spot gold fell from a record high of around $4,381 per ounce to an intraday low of $4,082.

The sharp decline resulted from a combination of factors, including profit-taking after a prolonged rally, easing geopolitical tensions — particularly in US-China trade relations — a stronger US dollar, and technical indicators signaling overbought conditions.

Silver drops 7.5% as investors exit safe-haven assets

Silver prices also plunged on Tuesday, falling around 7.5% to a low near $47.12 per ounce, marking one of the biggest single-day declines in recent years and tracking gold’s historic sell-off.

The fall in silver reflected investors’ exit from both safe-haven and industrial metals as the stronger US dollar made dollar-denominated commodities more expensive for holders of other currencies.

Positive developments in US-China trade talks — including the upcoming meeting between Presidents Donald Trump and Xi Jinping — further reduced demand for precious metals as safe-haven assets. In addition, technical indicators triggered sell signals after silver reached overextended price levels, prompting a wave of profit-taking.

Despite the short-term correction, the fundamental outlook for silver remains strong, supported by growing industrial demand in areas such as solar energy, electric vehicles, and artificial intelligence, as well as steady central bank purchases and ETF inflows that continue to support prices over the medium and long term.

Strong US dollar adds pressure to metals

The US dollar has strengthened notably in recent days, with the Dollar Index (DXY) reaching around 98.91 on October 21, 2025 — its highest level in about a week and up 0.33% from the previous session.

The dollar’s rise was driven by optimism over a resolution to the US government shutdown and improving expectations for a fair trade deal between Presidents Trump and Xi, which boosted confidence in the US economy.

The greenback is also supported by expectations that the Federal Reserve will cut interest rates soon. Investors anticipate a 25-basis-point reduction next week, with potential for further cuts thereafter.

Although the dollar has gained about 1.6% over the past month, it remains down roughly 5% year-to-date. A stronger dollar raises the cost of dollar-priced assets such as gold and silver for foreign investors, adding selling pressure to commodity markets.

Profit-taking and shifting geopolitical sentiment behind the sell-off

Many analysts believe today’s sharp drop in gold prices is primarily due to profit-taking after the metal reached record highs. Investors who bought earlier in the year chose to lock in gains rather than risk exposure to a potential correction.

Easing geopolitical tensions and improving international trade relations also contributed to a shift in sentiment toward riskier assets such as equities, reducing demand for gold as a safe haven.

Gold market outlook and next moves

Traders and short-term speculators are closely watching upcoming economic data, especially inflation figures and Federal Reserve policy updates, which will shape gold’s direction in the coming weeks.

Despite current volatility, analysts maintain that gold remains an attractive long-term investment, recommending that investors view price dips as strategic buying opportunities rather than panic-selling during temporary corrections.

Experts emphasize that recent moves highlight the importance of portfolio diversification: while gold offers protection against inflation and uncertainty, balanced portfolios with a mix of asset classes provide more effective risk management.

Many investors see the current decline as a potential buying opportunity, as historical patterns suggest gold often rebounds strongly after steep corrections, particularly amid ongoing global economic uncertainty.

Looking ahead, gold prices are expected to remain volatile, influenced by investor sentiment, dollar strength, geopolitical developments, and central bank decisions. Market experts advise close monitoring and prudent risk management in the period ahead.

European nations, in cooperation with Ukraine, are working on a 12-point proposal to end the war with Russia along the current front lines, countering renewed demands from Russian President Vladimir Putin that Kyiv surrender part of its territory in exchange for a peace deal.

The proposed plan calls for the return of all deported Ukrainian children and the implementation of a prisoner exchange, while Kyiv would, in return, receive security guarantees, funding to repair war damage, and a fast-track path to European Union membership.

The plan also includes a gradual lifting of sanctions on Russia, though roughly $300 billion in frozen Russian central bank reserves would not be returned to Moscow until it agrees to contribute to Ukraine’s postwar reconstruction.

Copper prices fell on Tuesday as the US dollar strengthened against most major currencies, reversing the previous day’s gains that were supported by expectations of stronger demand growth.

Consumption in the United States and India is expected to emerge as the main drivers of global copper demand over the next decade, after decades of Chinese dominance in the market — a dominance that is now slowing as China’s growth in copper demand loses momentum.

China’s industrial boom and large-scale infrastructure expansion fueled a historic rally that pushed copper prices above $10,000 per metric ton, compared to around $1,500 twenty-five years ago.

While China will remain the world’s largest copper market through the next decade and beyond, analysts expect new regional and geopolitical dynamics to play a greater role in shaping demand and prices worldwide.

Analysts note that shifts in regional policies, infrastructure investment cycles, and global political realignments will force producers, consumers, traders, and investors to adapt to a market now driven by multiple forces rather than a single dominant player.

Tom Price, an analyst at Panmure Liberum, said, “China’s pace of copper consumption and stockpiling will slow, and we’ll return to traditional demand drivers, primarily replacement and renewal cycles outside of China.”

He added that the full impact of these shifts has yet to materialize, but efforts by the United States and other nations to encourage domestic manufacturing will likely slow China’s export-oriented industrial activity, thereby reducing its refined copper demand — estimated at around 15 million tons this year.

In contrast, the expansion of data centers to support artificial intelligence technologies and the modernization of power grids are expected to drive copper demand growth outside of China, becoming the main catalysts for price increases.

Price explained that “China has already built out most of its infrastructure, including its power grid, so its activity will gradually decline in line with its needs,” predicting that Chinese copper demand in 2031 will be about 6% lower than in 2026.

He also projected that China’s share of global primary copper consumption will drop to 52%, or roughly 27 million tons in 2031, compared with 57% in 2026.

Meanwhile, US demand is expected to reach 2.2 million tons in 2031, up nearly 50% from 2026, while India’s consumption is expected to exceed 1 million tons, a rise of more than 30%.

Growing Western Resistance

Analysts also expect the new 50% US tariff on copper tubes and wires — imposed by President Donald Trump — to stimulate domestic production.

For China, however, these measures could mean losing one of its key export markets for copper products. According to Trade Data Monitor, the United States is China’s fourth-largest market for copper tube exports.

Washington imported 14.4 million tons of copper tubes from China last year, and shipments reached 8 million tons in the first seven months of this year — highlighting the potential market loss for Beijing.

Duncan Hobbs, Research Director at Concord Resources, said, “China’s output of manufactured goods, particularly those destined for export, is likely to slow due to increasing resistance from Western economies.”

These exports include copper wires used in power grids. A decade ago, the US Department of Energy found that 70% of the country’s transmission lines were over 25 years old.

Meanwhile, India is expanding its electricity network to support its goal of achieving 500 gigawatts of non-fossil-fuel-based energy by 2030.

Across Asia (excluding China), consultancy Benchmark Mineral Intelligence (BMI) expects copper demand to rise by 25% to more than 9.2 million tons between 2025 and 2030.

For the power infrastructure segment — including electrical grids, data centers, and telecommunications — BMI forecasts a 35% increase in demand to 2.2 million tons, while Chinese companies are projected to see more modest growth of 4% and 11%, respectively.

Infrastructure Renewal in the West

Efforts to modernize electricity grids in Western nations are focused mainly on upgrading existing systems — a gradual and less copper-intensive process compared to building new networks from scratch, as China did.

Robert Edwards, Principal Analyst at metals consultancy CRU, said he had long expected China’s dominance in the copper market to fade, but massive Chinese investments in electric vehicles, renewable energy, and power networks have delayed that shift.

CRU now forecasts that China’s share of total global consumption of mined and recycled copper will decline to 57% of 31.36 million tons in 2030, down from 59% of 27.62 million tons this year.

“China’s demand growth potential is now limited,” Edwards concluded, “and we should expect more of the expansion to come from the rest of the world.”

As of 16:57 GMT, the US Dollar Index rose 0.3% to 98.8, hitting a high of 98.9 and a low of 98.5.

In US trading, December copper futures fell 1.4% to $4.96 per pound at 16:39 GMT.

Bitcoin prices fell on Tuesday, sharply reversing their limited weekend gains, as cryptocurrencies underperformed compared to other high-risk assets that benefited from easing trade tensions between the United States and China.

Bitcoin, the world’s largest digital currency, led the losses across the crypto market even as global risk appetite improved, supported by political developments in Japan and expectations of renewed US–China trade talks.

Bitcoin dropped about 3% to $107,712.3 by 01:43 a.m. Eastern Time (05:43 GMT).

Recovery Momentum Fades as “Uptober” Rally Dissolves

Bitcoin struggled to stay above the $110,000 level this week after suffering a flash crash earlier in October that dragged it down from record highs and wiped out roughly $500 billion in total crypto market capitalization.

Analysts noted that the October crash reinforced a sense of caution and risk aversion in the digital asset space, as traders have become reluctant to place large bets amid heightened volatility.

The optimism surrounding the so-called “Uptober” — a seasonal trend in which cryptocurrencies typically outperform in October — has also faded quickly, with Bitcoin now down more than 2% since the start of the month.

In a research note, Forex.com analysts wrote: “So far, October has not unfolded the way bullish Bitcoin traders expected. Instead of the usual seasonal strength, performance has been muted, and the early rally reversed sharply mid-month — a move that may not be over yet.”

They also pointed out that Bitcoin has increasingly decoupled from traditional financial markets, particularly equities, as cryptocurrencies have retreated even while Wall Street indices hit a series of record highs in recent weeks.

“Bitcoin is clearly lagging in an environment where most risk assets are posting strong gains,” the analysts said.

Altcoins Slide as Ripple Fails to Benefit from Corporate News

The broader crypto market also came under renewed pressure on Tuesday, with most altcoins following Bitcoin lower after a brief recovery.

Ether (ETH), the world’s second-largest cryptocurrency, fell 5.3% to $3,859.65 after failing to hold the key psychological level of $4,000.

Ripple (XRP) also declined 2.2% to $2.4145, showing little reaction to reports that Ripple Labs plans to establish a new corporate treasury backed by the issuer itself.

During the Asian session, cryptocurrencies extended their declines even as Asian stock markets surged to record highs — led by Japan’s Nikkei following conservative candidate Sanae Takaichi’s advance toward becoming prime minister, and by Chinese markets rallying after conciliatory remarks from Washington over ongoing trade tensions.