Precious metals that had been soaring suddenly experienced a flash crash! “It was completely unexpected, my gold ETF lost a month’s salary in one day!” a young investor lamented in a group chat early in the morning.

On October 21, gold and silver experienced their most significant plunge in years.

London spot gold fell by 5.31%, marking its largest single-day drop since April 2013, closing at $4,124.355 per ounce. London spot silver dropped by 7.11%, its biggest decline since 2021, settling at $48.662 per ounce.

The decline continued on October 22. Spot gold briefly fell to $4,002 per ounce and was trading below $4,100 per ounce at the time of writing. Spot silver temporarily fell below the $48 mark.

Affected by the international precious metals slump, China’s A-share precious metals sector fell over 4%. All six gold stock ETFs dropped more than 4%, while 14 commodity gold ETFs also declined over 5%.

Among individual stocks, Hunan Silver fell nearly 9%, with companies like Xiaocheng Technology and Western Gold dropping over 7%.

This rare precious metals crash, with spot gold falling nearly $300 in a single day, caught countless investors off guard.

Industry experts suggest this precious metals collapse resulted from a combination of factors including profit-taking, reduced safe-haven demand, a stronger US dollar, and monetary policy expectations.

So where will gold go after this significant drop?

Citibank predicts that the end of the US government shutdown and the announcement of a US-China agreement could push gold into a consolidation phase over the next 2-3 weeks. Citibank has turned bearish on gold in the short term (previously bullish, now bearish), setting a 0-3 month target price of $4,000 per ounce.

A precious metals analyst stated: “Although from a medium to long-term perspective, central bank gold purchases and growing investment demand will continue to push precious metals prices higher, the short term is entering an adjustment phase. During sharp declines, watch for medium-term opportunities to buy on dips, while existing long positions should be held cautiously.”

A senior banking professional analyzed that this crash might present a buying opportunity, but warned to remain cautious about potential impacts from inflation data and Federal Reserve meetings. Particularly in the context of ongoing global uncertainty, rationally allocating gold assets could be a wise choice to weather future storms.

London spot gold

“London spot gold” refers to the global benchmark price for immediate gold delivery, set twice daily by the London Bullion Market Association (LBMA). This pricing mechanism, historically centered in London due to its role as a major financial hub, dates back to 1919 and establishes the standard for gold trading worldwide. It is not a physical location but a financial market process that determines the value of gold.

London spot silver

“London spot silver” refers to the daily benchmark price for physical silver traded in London, set by the London Bullion Market Association (LBMA). This pricing mechanism has historically been central to the global silver market, with its origins in London’s role as a major financial and trading hub. It represents the standard for immediate wholesale silver delivery and is used worldwide for valuing silver assets.

China’s A-share precious metals sector

China’s A-share precious metals sector consists of publicly traded companies involved in gold, silver, and other precious metals mining, processing, and trading on Chinese stock exchanges. The sector’s development has been heavily influenced by government policy, with significant growth following China’s gold market liberalization reforms that began in the early 2000s. It serves as a key investment channel for domestic investors seeking exposure to commodity prices and acts as a barometer for the health of China’s resource and financial industries.

Hunan Silver

I am unable to find any significant cultural or historical site known as “Hunan Silver.” It is possible this refers to a local business, a product like silver jewelry from the Hunan province, or may be a mistranslation. For an accurate summary, please verify the correct name of the place or provide more context.

Xiaocheng Technology

Based on available information, “Xiaocheng Technology” does not appear to be a historical place or cultural site. It is most commonly the name of a modern technology company or industrial park in China, focusing on areas like software development or electronics manufacturing. As a contemporary business entity, it does not have a significant historical background for a cultural summary.

Western Gold

I am unable to provide a summary for “Western Gold” as it does not appear to refer to a widely recognized specific place or cultural site. The term could potentially refer to a company, a product, or a concept related to the historical gold rushes in the western United States and Australia. For a more accurate summary, please verify the specific location or context you have in mind.

Citibank

Citibank is a major global financial institution founded in 1812 as the City Bank of New York. It played a pivotal role in the development of the U.S. banking system and became a pioneer in providing banking services to a mass market, notably through the introduction of ATM machines. Today, it is one of the largest banks in the world, operating in over 160 countries.

Federal Reserve

The Federal Reserve is the central banking system of the United States, created in 1913 by the Federal Reserve Act to provide the country with a safer, more flexible, and more stable monetary and financial system. It performs key functions such as conducting monetary policy, supervising and regulating banks, and maintaining financial stability.