Precious Metals Flash Crash: Gold Dives 5% After Hitting $5,600

The relentless rally in precious metals hit a violent air pocket on Thursday, reminding traders that parabolic moves often end in sharp corrections. After touching a new all-time high of $5,597/oz, spot Gold collapsed, shedding nearly 5% in a matter of minutes to test the $5,100 zone.

• Spot Gold hit ATH of $5,597/oz before correcting.
• Correction depth reached 5% testing $5,100.
• Silver (XAG/USD) led losses, dropping 6.5%.

Anatomy of the Crash

The sell-off appears to be technical rather than fundamental. The Relative Strength Index (RSI) had reached extreme overbought levels, signaling a stretched market.

• Trigger: A cascade of profit-taking orders triggered stop-losses on highly leveraged long positions.
• Contagion: Silver (XAG/USD) suffered even steeper losses, plummeting 6.5% to trade near $109.40, retreating from its own record high of $121.66.

Underlying Bulls Remain Intact

Despite the “flash crash,” the macro drivers that sent Gold to these stratospheric heights remain active:

Analyst Outlook & Technicals

Market technicians view this as a “healthy reset.” Key support lies between $5,100 and $5,200. If this zone holds, the long-term uptrend targeting $6,000 remains viable. However, volatility is expected to remain extreme, and traders should be wary of trying to catch the falling knife until stability returns to the Asian trading session.