Spot gold big dump 6%, creating the largest fall in over 12 years, analysts warn of bubble risk.

On October 21, according to the Financial Times, gold prices plummeted 6% on Tuesday, marking the largest single-day drop since April 2013. This historic surge in gold prices has temporarily paused as the gold buying season for India's Diwali festival comes to an end. After reaching a high of $4381 per ounce on Monday, gold prices suddenly dropped to $4082 on Tuesday, with the market widely viewing this as a delayed pullback. This year’s historic rise has accelerated in recent weeks, with a 25% increase in just the past two months. Nicky Shiels, head of metal strategy at MKS PAMP SA, stated, “The market is showing signs of a bubble, with the main catalyst being the extreme overbought condition — this rally is nearing its peak. The fact that prices surged $1000 in six weeks indicates that gold is overvalued, and we are at an irrational high.” Analysts pointed out that the recent rebound of the dollar and the lack of futures market holdings data due to the U.S. government shutdown have contributed to the most severe drop in gold prices since 2013.