Gold Plummets! What Happened in the Market Yesterday

2025/10/22
Review of yesterday's market!
Summary of U.S. Stock Market Movements on October 21
The Dow Jones Industrial Average rose by 0.47% from the previous day, hitting a new all-time high.
The S&P 500 Index edged up by 0.003%, extending its fluctuation around record highs.
The Nasdaq Composite Index dropped slightly by 0.16% (from 22,990.54 points to 22,953.66 points), as some tech stocks were affected by fund rotation.

Key driving factors:
Industrial stocks, led by companies such as General Electric and RTX, supported the Dow Jones Industrial Average in reaching a new high.
Market risk appetite rebounded, with capital shifting from high-volatility technology stocks to defensive assets and the industrial sector.
The US Dollar Index rebounded to 98.90, while gold plunged to a low of $4,002 per ounce, reflecting some profit-taking flowing back into US dollar assets.

II. Targets with Significant Trading Volume
The following individual stocks experienced unusual trading volumes and price movements due to specific events:

Analysis of Price Changes/Event Causes for the Target
Beyond Meat ( $Beyond Meat (BYND.US)$ ) surged 146% in a single day, with cumulative gains exceeding 270% over the past two days. Market rumors suggest the company launched a new plant-based protein product, coupled with short-covering pressures.
$Eos Energy (EOSE.US)$ Pre-market rose 7.93% after TD Cowen raised its price target to $10 (from $6), amid market bets on growth in energy storage demand.
$RTX Corp (RTX.US)$ Pre-market up 5.11% as Q3 results exceeded expectations, and the company raised its 2025 revenue and EPS guidance, boosting investor interest in the aerospace and defense sector.
$Bilibili (BILI.US)$ Pre-market up 6.17% as the new game 'PvE Battle Royale' sold over 500,000 copies within three days, bolstering market confidence in its content ecosystem.
$Reddit (RDDT.US)$ Pre-market up 3.74% after Citi raised its price target to $250, with expectations of accelerated growth in its advertising business and the 'Reddit Answers' feature.

III. Structural Changes in the Market
- A Goldman Sachs report highlighted that momentum stocks, such as those in quantum computing and unprofitable tech sectors, faced 'forced liquidation' due to crowded positions, prompting a shift of capital toward low-volatility 'quality stocks.'
- The most heavily shorted U.S. stock index surged 16% this month, significantly outperforming the S&P 500's 0.7% gain, indicating that short squeezes may mask underlying weakness in investor confidence. Additionally, the absence of non-farm payroll and CPI data due to the U.S. government shutdown has left market uncertainty unresolved, driving investors toward defensive sectors and accumulating short positions.
- The yield on the 10-year U.S. Treasury fell to 3.96%, as markets bet that the Fed may continue rate cuts at its October 29 meeting, potentially shifting market forces in a more positive direction going forward.

- Gold plunged! Spot gold and gold stocks plummeted, with spot gold falling 6.3% at one point, marking its largest single-day drop since April 2013. Spot silver fell as much as 8.7% during the day, recording its steepest decline since 2021. The sharp drop appears to be driven by two key factors:
1. Leaders of Ukraine, the UK, Germany, France, and the President of the European Commission jointly supported a just peace, endorsing Trump's proposal for an immediate ceasefire and using current frontlines as the starting point for negotiations. This consensus among leaders provides favorable conditions for a concrete ceasefire between Russia and Ukraine.
2. The ceasefire between Russia and Ukraine is only one of the catalysts. From the perspective of market liquidity, the recent consecutive rallies in gold have led to some profit-taking. However, logically and from a long-term narrative, within the easing cycle and amid the persistently weak US dollar trend, gold's performance will continue to be remarkable. Short-term pullbacks are normal, and investors need not be overly concerned.

Summary
The US stock market exhibited structural divergence yesterday: industrial stocks and companies with better-than-expected earnings led the gains, while clear capital rotation was observed in technology stocks, with mounting selling pressure on momentum stocks. Unusual trading volume was concentrated in news-driven events (such as rating adjustments and product sales surges) and short-covering areas. Investors should pay attention to the impact of CPI and non-farm payroll data to see if it might affect the continued liquidity release in the gold market. In terms of interest rate cuts, an October rate cut appears almost certain.