On October 22, spot gold prices experienced a significant drop, plunging by 5.3% in a single day to close at $4,124 per ounce. This marked not only a one-week low but also the largest single-day decline since August 2020. During the session, gold prices sank to a low of $4,081 per ounce, nearly $300 below the day's peak, catching countless investors off guard. As of 11:07 AM on October 22, 2025, the price of international spot gold (London gold) was $4,111 per ounce, with a decline of -0.34%, ranging from a high of $4,132 to a low of $4,004.
Since the beginning of the year, gold prices have risen by approximately 60%, reaching a record high of $4,381 on Monday. Previous articles warned about the potential for a significant technical correction in gold prices, and the market witnessed a dramatic reversal within just one day. This gold "flash crash" not only alarmed global investors but also reflected the complex interplay of current international geopolitical dynamics, economic policies, and currency markets.
The sharp decline in gold prices was primarily driven by a collective profit-taking behavior among investors at elevated levels. This year's strong rise in gold prices was supported by multiple factors: geopolitical uncertainties, ongoing purchases by central banks worldwide, and strong expectations of interest rate cuts from the Federal Reserve. These factors drove gold to historic highs but also accumulated a large amount of speculative positions. When market sentiment shifted slightly, bulls began to sell off to lock in profits. Although there was buying interest on dips on Monday, the significant volatility at high levels over the past week released caution signals, further encouraging short-term profit-taking.
Considering the previous average daily fluctuation of around $100, yesterday's maximum drop of $300 reaffirmed the notion that "market uncertainty exists." It is crucial to maintain a respectful attitude towards operations, whether long or short, and to strictly set stop-loss limits. Avoid any trades without risk control. It’s advisable not to trade with the usual mindset regarding stop-loss levels; position management is paramount. Currently, a 10-point stop-loss may be inadequate, so positions should be reduced to about one-third of the usual size. When the market experiences sharp declines or surges, a gradual accumulation of positions can help manage overall trading losses.
From the one-hour gold chart, moving averages have formed a downward death cross, indicating a short-term weakening of gold. Therefore, shorting on rallies is the best strategy at this point. After breaking below the one-hour double top neck level, gold has started to hover below the neck line, with the first level of interest at 4,186, though it is somewhat distant. The second level is in the 4,140-4,130 range, close to today's high of 4,312, indicating that gold may face resistance on rebounds near 4,132.
Today's trading advice: Short gold around 4,132, with protection at 4,150 and a target of 4,050-4,030;