The price of gold experienced its largest drop in more than a decade, following a period of strong growth.
The Market Shift
On Tuesday, the immediate (spot) price of gold fell by 6.3% to $4,082 per ounce, after reaching a record level of $4,381 the day before.
- US futures contracts dropped by 5.7%, marking the largest fall since April 2013.
- The prices of silver and platinum also saw significant declines.
Factors Behind the Plunge
The sharp fall was attributed to several factors:
- Profit Realization: Investors sold off their holdings to realize strong profits.
- Trade Optimism: Renewed optimism regarding the resumption of US-China trade negotiations.
- Dollar Recovery: A recovery in the value of the dollar.
- Indian Demand: The end of the Diwali festival in India reduced demand for physical gold.
Despite the steep decline, the price recovered slightly on Wednesday, rising by 0.4%.
