The defending champion was upset by world No 20 Hollie Naughton in Birmingham today, winning the first game before falling apart in the deciding fourth.
King had never lost a game against the Canadian in four previous meetings but had no answer after the little-fancied Naughton crushed her in the second before edging a crucial third.
The Kiwi was eventually dispatched 7-11, 11-3, 11-9, 11-1, consigned to tomorrow's bronze-medal match and left unable to defend the title she won on the Gold Coast.
"I'm absolutely gutted," King said. "You can't take it away from Hollie - she capitalised on everything that I wasn't able to do out there. It just wasn't good enough."
King, a six-time Commonwealth Games medallist, had shown signs of vulnerability in yesterday's quarter-finals before prevailing in a titanic tussle.
The 33-year-old later apportioned some of the blame for her semifinal performances on the exertions of that match, having been pushed to her limit by world No 28 Lucy Turmel.
"I think yesterday, probably emotionally and mentally, took a little bit more out of me than I would've liked," King said. "Physically I felt OK, but when you're not sharp mentally, you're a little bit slower to the ball, you're not seeing the ball quite as well and you're not able to hit your targets."
Those mental struggles were especially evident in the fourth game, when King's quest for a fourth Commonwealth Games gold medal was on the line.
Her head noticeably dropped in the game as she lost the first nine points, essentially ending the contest. Asked what had gone wrong after starting strongly, King began to explain before cutting short her post-match interview in tears.
"Just mentally walkabouts," she said. "I felt like I was really in and out of zones, I could hear a lot of noise that was happening and things like that. So, as I say, I think yesterday…"
King will have little time to recover ahead of tomorrow's bronze-medal match, before she begins doubles play the following day.
She will team with Amanda Landers-Murphy in the women's doubles - the pair having won that event in 2018 - and world No 2 Paul Coll in the mixed doubles, surely looking forward to have teammate by her side.
Coll into gold medal match
Coll later eased through to the men's singles gold-medal match with a straightforward semifinal victory over India's Saurav Ghosal. The world No 2 showed confidence and flair in winning 11-9, 11-4, 11-1, and will now play world No 7 Joel Makin of Wales in tomorrow's final.
After continuing a standout 18 months that has taken him to the top of world squash, Coll expressed support for his defeated teammate and said watching King made him even more motivated for his match.
"I'm gutted for her, but it takes nothing away from who Joelle is," Coll said. "She's led our team from the front for over 10 years, winning medals left and right.
"She'll bounce back and I'm looking forward to playing with her in the mixed doubles. She's so strong, man, I don't think anyone really knows how strong she is and what she puts herself through for New Zealand."
King's battles in the singles were clear yesterday but had initially appeared a thing of the past at the University of Birmingham today.
She began the match by showing more composure than she had displayed in her quarter-final, breaking a 7-7 deadlock and Naughton's resistance by winning four straight points, taking out the game 11-7.
But Naughton recovered well and quickly raced to a 9-2 lead in the second game, with one questionable call going against King as a series of sloppy errors saw her fall 11-3, levelling the match.
Sensing the importance of the third game, King let out a cry of elation after her opponent couldn't reach one ball, jumping out to an early advantage. But Naughton continued to show touches of quality, particularly with her drop shots, and refused to let King go clear.
Facing game ball, King then requested a review after feeling she had been impeded, but replays showed that plea was likely more in desperation as Naughton went ahead two games to one.
And that was as close as it came for King, wilting in the final game as Naughton closed out the match to ensure King wouldn't be crowned singles champion again.
By Kris Shannon in Birmingham
