International gold prices have halted their recent surge, posting the largest single-day decline in 12 years since 2013. Silver and platinum prices also weakened alongside gold.

This sharp correction is attributed to investors taking profits after a period of overheated gold and silver investment, as well as a calming of safe-haven demand amid growing expectations for eased trade tensions ahead of next week's United States-China summit.

On the 18th, as gold prices soared and a gold bar shortage occurred, an employee showed a gold bar sample to a customer visiting the Jongno main branch of the Korea Gold Exchange in Jongno-gu, Seoul. 2025.2.18. Photo by Kang Jinhyung

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On the 21st (local time) at the New York Commodity Exchange (COMEX), December gold futures closed at $4,109.1 per ounce, down 5.7% from the previous day. This marks a sharp drop just one day after hitting an all-time high, and represents the largest decline since 2013.

The drop in silver was even steeper. December silver futures fell 7.2% from the previous day to $47.45 per ounce. Platinum also plunged 8% based on December futures contracts.

This decline in gold and silver prices is seen as the result of a wave of profit-taking following concerns about an overheated market due to the recent surge.

Since the beginning of this year, gold prices have rallied about 60%. This was driven by a combination of rising U.S. federal debt, doubts about the U.S. dollar, and concerns over President Donald Trump's trade war, all of which fueled a surge in demand for safe-haven assets.

However, the sell-off for profit-taking accelerated the decline. In addition, the stronger U.S. dollar increased the relative price burden of gold for holders of other currencies, amplifying the drop. Furthermore, as the Diwali festival ended and the wedding season began in India-the world’s second-largest gold consumer-the gold buying season is nearing its end, further weakening demand.

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With expectations for eased trade tensions ahead of next week's United States-China summit, demand for safe-haven assets also appears to have weakened. President Donald Trump and Chinese President Xi Jinping are expected to hold talks and reach a trade agreement during the Asia-Pacific Economic Cooperation (APEC) summit in Gyeongju, South Korea. As a result, global tensions are easing and risk aversion is subsiding.

Bart Melek, Global Head of Commodity Strategy at TD Securities, commented, "After the recent strong rally in precious metals, investors are taking profits," adding, "This surge was not historically sustainable."

Suki Cooper, Analyst at Standard Chartered, noted, "Given the sharp rise in metal prices this year, the recent selling is not surprising," and analyzed, "The market has entered a technical correction phase as the investor base has expanded rapidly."

However, some experts predict that the correction will be limited.

Ole Hansen, Head of Commodity Strategy at Saxo Bank AS, stated, "With concerns about a correction and subsequent price stagnation growing, traders have become more cautious in recent days. The true strength of the market is revealed during correction phases. This time will be no exception, and with underlying buying interest still present, the correction is expected to be limited."