Gold prices plunged more than 5% on Tuesday, marking their steepest one-day decline since 2013, as investor enthusiasm quickly turned to profit-taking after the haven asset’s record-setting run. The metal had reached an all-time high of $4,381.21 per ounce on Monday before sliding to around $4,140 early Wednesday, according to TradingView data.
Silver also pulled back sharply, while major mining stocks such as Newmont saw steep losses. Market analysts said the selloff followed one of the most intense rallies in recent memory, fueled by mounting concerns about inflation, fiscal instability, and ongoing geopolitical tensions.
Professional trader Peter Brandt estimated the metal’s market capitalization dropped by roughly $2.1 trillion in a single day, a loss equivalent to more than half the combined market value of all cryptocurrencies. The decline underscored the volatile nature of the recent gold run, which some investors described as displaying characteristics of “meme and momentum” trades.
“In terms of market cap, this decline in Gold today is equal to 55% of the value of every cryptocurrency in existence. @PeterSchiff ‘s pet rock lost $2.1 trillion in value today. That is 2,102 billion $ worth,” Brandt shared on his X account.
Stock market shines as gold fades
While precious metals cooled, equities moved in the opposite direction. The Dow Jones Industrial Average closed at a new record, rising 0.5% and logging its 12th record finish of the year. A strong start to the third-quarter earnings season buoyed investor confidence, with General Motors and RTX reporting better-than-expected results.
GM shares jumped nearly 15%, hitting their highest close ever after the automaker posted robust financials, according to Google Finance. Across the broader market, FactSet data showed that 86% of companies reporting by last Friday had beaten earnings expectations. The upbeat sentiment helped offset softness in sectors tied to commodities.
After markets closed, however, Netflix shares slid as the company reported operating margins and net income below analysts’ forecasts.
Treasury yields also slipped, signaling renewed demand for U.S. government debt. The benchmark 10-year yield settled at 3.962%, its lowest level since October 2024.
Analysts remain upbeat on gold’s fundamentals
Despite the sharp decline, analysts at Lombard Odier, a Swiss private bank, said the long-term outlook for gold remains strong. Strategists Kiran Kowshik and Luca Bindelli wrote that the metal’s “accelerating demand and constrained supply” continue to provide strong support even at elevated price levels.
According to the analysts, central banks remain a crucial stabilizing force for gold, steadily increasing their holdings since 2008. They argued that gold retains its classic characteristics as a unit of account and store of value, an advantage at a time when high U.S. debt is weighing on Treasurys.
Lombard Odier raised its 12-month gold price target from $3,900 to $4,600 per ounce, highlighting that ongoing fiscal concerns and a potentially weaker U.S. dollar could encourage central banks to diversify further into gold.
Bitcoin moves opposite to gold as rotation begins
As gold stumbled, Bitcoin (BTC) edged higher, rising around 0.5% in the past 24 hours to trade at roughly $108,491. Market observers described this as another example of capital rotation between traditional safe-haven assets and digital alternatives.
Analyst Ash Crypto said the movement could mark the start of a broader shift favoring cryptocurrencies over gold, potentially preceding a strong fourth-quarter rally for Bitcoin and altcoins. Similarly, entrepreneur Anthony Pompliano noted that the “great rotation” from gold to Bitcoin may already be underway.
Market research firm Swissblock added that this pattern has emerged before. Earlier in the year, Bitcoin rallied soon after a brief gold downturn, a sign of decoupling between the two assets. If the trend holds, Bitcoin could finish the year strongly while gold stabilizes at a higher base.
Gold is having one of its worst days on record while Bitcoin is pumping.
— Swissblock (@swissblock__) October 21, 2025
When gold flips violently, $BTC often answers, rising.
In April, gold dumped 5% in 3 days, right before Bitcoin broke out from its macro bottom and expanded, while gold consolidated. 👇 pic.twitter.com/JDgPjuL82V
Market outlook
For now, traders are watching whether gold’s correction will settle into a consolidation phase or trigger a deeper slump. Despite the recent volatility, institutions and central banks continue to see gold as a long-term hedge against debt expansion and currency risks.
At the same time, crypto assets appear to be gaining traction as alternative stores of value, particularly among retail and tech-leaning investors. The simultaneous rise of equities, Bitcoin, and the Dow’s record-breaking performance paints a complex picture, one where traditional and digital markets are moving out of sync but still driven by the same underlying force: a global search for stability amid uncertainty.
Tanya Petrusenko
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