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Fading global safe-haven demand reversed gold’s record-breaking performance into a free fall not seen since October 2008, with prices down by over 6% to the $4,000 level on Tuesday.
The massive sell-off was triggered by signals of easing trade tensions between the U.S. and China following President Donald Trump’s remarks, as well as a looming resolution to the U.S. government shutdown, which entered its 21st day.
Spot prices, which hit an all-time high of $4,381.60 per ounce on Monday, abruptly crashed to $4,086 at Tuesday’s close and continued to retreat to $4,004 on Wednesday. However, after President Trump announced that reciprocal tariffs on Chinese goods would rise to 155% by November 1 if current negotiations failed to deliver a result, spot prices rebounded above $4,100.
Before Tuesday’s collapse, gold prices had been hovering above $4,300, standing as one of the highest-yielding global assets with over 60% gains year-to-date, already making 2025 the best-performing year since 1979. Recently, it showed its best weekly performance since September 2008, when the global financial crisis rattled markets, with gains nearing 10% last week.
The most crucial factors that propelled investors toward gold were rising trade uncertainties tied to Trump’s protectionist policies, an exponential increase in holdings by central banks and institutions, and global ETF demand, which accelerated after the Fed’s first rate cut of the year in September—making precious metals more attractive as borrowing costs eased.
The U.S. government shutdown following failed budget negotiations also added to the uncertainties, as it delayed the release of key economic data from public institutions.
Other precious metals mirrored gold’s fluctuations. Silver, which also touched an all-time high above $54 earlier this week, lost more than 8.1% by Tuesday’s close, declining to $47 per ounce. Platinum and palladium also joined the rout, falling by 7.1% and 6.6% to $1,525.65 and $1,399.35, respectively.
As of 06:15 GMT, silver traded around $49.1, platinum around $1,538.93, and palladium around $1,427.25.
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