Gold’s frenzied rally ends with largest sell-off in over a decade

By John Liu, CNN

(CNN) — Gold prices gained modestly on Wednesday after the precious metal’s spectacular rally came to an abrupt halt on Tuesday, when prices tumbled more than 5%.

The drop in the price of gold, which is viewed as a safe-haven asset in times of uncertainty, came as investors took profits from a record-breaking rally and as American and Chinese officials are expected to meet again for another round of trade talks.

Gold was last trading at $4,141.48 per troy ounce at 1:46 am ET on Wednesday, up less than 0.4%.

On Tuesday, spot gold fell as much as 6.3% to $4,082.03 a troy ounce, after hitting an all-time high of $4,381.21 on Monday. US gold futures settled down 5.7% at $4,087.70, marking the steepest percentage decline since April 2013. Silver and platinum also slumped sharply on Tuesday, down 7% and 5% respectively.

Analysts said the sell-off followed weeks of heavy buying that had pushed gold to overheated levels.

Gold has seen historic gains in 2025, its more-than-50% surge surpassing previous volatile periods such as after the September 11 attacks, the 2008 financial crisis or even the Covid-19 pandemic.

In the past two months alone, gold prices have rallied 25%, driven by demand amid rising US government debt, political uncertainty, and speculation about further interest rate cuts by the Federal Reserve.

But optimism over easing trade tensions between Washington and Beijing, as well as a rebound in the US dollar, prompted investors to lock in profits. Despite renewed tensions between the world’s two largest economies in recent weeks, their trade representatives are expected to meet late this week ahead of a planned meeting between Chinese leader Xi Jinping and US President Donald Trump next week.

“I expect we’ll probably work out a very fair deal with President Xi of China,” Trump said on Monday. “I think we’re going to work out something that’s good.”

Analysts have also pointed to the end of the Diwali festival in India, the world’s second-largest gold consumer, reducing physical demand, as another reason for the fall in gold prices.

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CNN’s Kevin Liptak and Matt Egan contributed to this report.