Global gold and silver markets saw a sudden correction this week after an unprecedented rally. On Oct. 21, spot gold fell roughly 5-6% from its Monday peak (around $4,381) to about $4,090 per ounce. Silver also plunged sharply, more than 8% at one point, to around $48.40 per ounce. This represented the metals’ steepest single day losses in over a decade. Even so, gold remains about 57% above its price at the start of 2025, and silver is up roughly 68% for the year. In short, Tuesday’s drop wiped out weeks of gains but followed an extraordinary run up to fresh records for both commodities.

Investors and analysts say the pullback was driven mainly by profit taking and a shift in market sentiment. During the rally, prices were propelled by “safe haven demand” amid inflation fears and global uncertainty. Many traders began “cashing in on substantial profits” once news emerged of easing economic risks. Positive signals on U.S.-China trade talks and prospects for ending the U.S. government shutdown removed some of the urgency to buy precious metals. At the same time, a firmer U.S. dollar made dollar priced gold and silver more expensive for international buyers. The combined effect prompted a swift sell off: as StoneX strategist Matt Simpson put it, the thaw in trade tensions was “the snowflake which caused the avalanche” in gold’s momentum.

Even veteran market watchers sounded a note of caution. Legendary bond investor Bill Gross warned just before the drop that gold had started behaving like a “meme and momentum stock,” implying the parabolic rally might be running out of steam. In other words, the extraordinary gains had left many latecomers vulnerable to a sharp reversal. Still, most analysts emphasize that this is a normal consolidation in an ongoing bull market, not a fundamental bear market turn.

UAE Market Reaction

The price slide in gold and silver was also felt in the UAE. Dubai 24K gold briefly fell below AED 500 per gram (about $136), trading near AED 495 on Tuesday evening. (By contrast, it had opened that day at a record AED 525.25 per gram.) Other purities moved similarly, for example, 22K gold eased into the AED 460s. Silver prices in the UAE mirrored global trends, dipping back under $50. For local buyers, the retreat brings some relief after months of extreme highs. Analysts note that the pullback “could mark the beginning of a much needed price correction,” creating “a window to purchase gold at lower levels”. In short, the drop gives Emirati consumers a pause to buy more affordably, though experts warn that volatility may remain elevated in the short term.

Despite the volatility, most analysts remain bullish on gold and silver over the long run. The metals have been supported all year by strong underlying factors: high inflation, low real interest rates, and heavy buying by central banks worldwide. For example, the World Gold Council confirms that official institutions continue adding to gold reserves to diversify away from the U.S. dollar. With inflation still high and the U.S. Federal Reserve expected to begin cutting rates in 2026, many observers say “long term support for gold remains intact”. In that light, the one-day selloff on October 21 is widely seen as a healthy correction rather than a change in the bull trend. UAE and global investors will be watching upcoming economic data and policy signals, but for now the sharp pullback is largely viewed as part of the normal ebb and flow in precious metals markets