Bitcoin, gold bounce following bullion's biggest single-day decline in 7 years

Gold recovered some losses Wednesday morning after posting its worst day in seven years just a day earlier.

Bullion was up more than 1.59% at $1,941 an ounce at the time of writing. That's a turnaround after it shed more than 5% during Tuesday's trade—its largest single-day drop since 2013. Analysts tied the precipitous fall of the precious metal to gold being overbought as it rallied above historic levels earlier this month, as well as rising U.S. yields. 

"The rise in US yields delivered a sledgehammer blow to precious metal markets on Tuesday, with gold falling 5% and silver taking a massive 15% hit," wrote Craig Erlam, senior market analyst at OANDA Europe. "The rally over the summer has come as US real yields have gone negative and continued to decline so the sudden spike over the last couple of days triggered a rush for the exits in what has become an incredibly overcrowded trade."

Indeed, not even a spike in PPI offered relief for bullion. On Tuesday, the Department of Labor said that the producer price index, which measures inflation for producers before it hits consumers, rose 0.6%, the highest move upward since 2018. 

Meanwhile, bitcoin's lockstep trading with gold continued into Wednesday. After falling more than 4% over the course of Tuesday, bitcoin was trading up 1.5% at the time of writing.