The Europeans pulled off a major upset as they reached the semi-finals at the expense of the team boasting the best record on Beach Volleyball's World Tour this year.
After being edged out in a tight opening set, Latvia responded superbly, taking the second before carrying the momentum into the decider on their way to a 19-21 21-18 15-11 win.
The defeat sees Gibb and Rosenthal follow compatriots Todd Rogers and Phil Dalhausser through the exit door after the reigning champions were dumped out by Italy in the last 16.
For Latvia, the adventure continues and they face gold medal favourites Alison Cerutti and Emanuel Rego of Brazil in the last four.
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