Gold, which had been hitting record highs day after day, plunged 3.6% in the London market

Easing of U.S.-China tensions and prospects of U.S. government shutdown resolution

Gold, which had been hitting record highs day after day, plunged on the 21st (local time) in the London market by the largest one-day drop in four years.

As of 2:09 p.m. London time on the 21st, gold was 4,201.12 dollars per ounce, down 3.6% from the previous day. This was due to eased tensions between the U.S. and China. Also, the prospect that the U.S. government shutdown could end this week influenced the easing of gold prices. The previous day, Kevin Hassett, chair of the U.S. National Economic Council (NEC), said the government shutdown could end within this week.

After hitting a record of 4,381.52 dollars per troy ounce the previous day, gold fell as much as 3.8% intraday on that day.

According to Bloomberg, gold's recent sharp rally indicates that technical indicators, such as relative strength, show prices have entered overbought territory.

As India's seasonal buying craze ended, demand for precious metals as safe-haven assets cooled somewhat. U.S. President Donald Trump and Chinese President Xi Jinping are scheduled to meet in South Korea next week to hold trade-related talks.

Dan Galli of TD Securities said, "The sharp rise in gold is due to investors' extreme FOMO (fear of missing out)."

Gold has recorded nine consecutive weeks of gains so far this year. Buoyed by purchases from central banks and inflows into exchange-traded funds (ETFs), gold prices have risen more than 65% so far in 2025. Also, as demand for safe-haven assets surged amid geopolitical and trade conflicts, rising fiscal and debt levels, and perceived threats to the Fed's independence, precious metals such as gold and silver benefited.

Guest reporter Kim Jeong-ah kja@hankyung.com