After making two double tops in quick time, gold prices have crashed. Gold reached an all-time high of 4381.58 and now trades around $3,941, nearly 10% lower.
Silver also saw selling pressure as the price fell below $47 per ounce. Last week, silver fell more than 6% as profit-taking slammed the market amid fears of overvaluation following the metal’s run to record levels.
Gold price today in India is Rs 1,18,210. After reaching to all-time high level of around Rs 1,30,620 on October 20, the price has fallen by about Rs 12,000 or 10% from record high.
So far in 2025, gold prices have increased by nearly 50%, driven by economic and geopolitical uncertainty as well as strong central bank purchases. Silver is up by 60% year-to-date.
Of late, both gold and silver prices have crashed by over 10%.
Reasons cited for the selling pressure seen in the precious metals are profit booking amidst expectations of a US-China trade deal diminished demand for this safe-haven asset.
As risk sentiment improves, the US stock market indices are at new record highs, while safe-haven assets such as gold and silver lag.
The progress in US-China trade negotiations seems to have dampened demand for safe-haven metals.
President Trump and President Xi are likely to finalize the trade deal later this week in South Korea. Markets are expecting a trade breakthrough at the Trump-Xi meeting on Thursday, following talks between US and Chinese trade representatives over the weekend that resulted in agreement on several issues.
US Treasury Secretary Scott Bessent said Trump’s threat of a 100% tax was “off the table,” and Beijing agreed to postpone a year-long extension of rare earth export limits.
Any negative reports emerging from the US-China trade deal could again support gold prices.
The focus now shifts to the Federal Reserve’s policy decision on Wednesday, with markets anticipating a 25-basis-point rate decrease following last week’s weaker-than-expected inflation report.
The two-day Federal Open Market Committee (FOMC) meeting is underway on October 28-29, and the final decision of the Fed members will be announced by Fed chair Powell on October 29.
Gold gets support from a lower interest rate scenario. Indications from Fed chair Powell regarding aggressive rate cuts could lead to a rally in gold prices, while a hawkish stance may result in further sell-offs.
Both gold and silver prices have run up a lot. Expect market corrections, consolidation, and volatility ahead, as sharp downturns may follow sharp turnarounds. Experts indicate that these corrections will define the next upward movement, revealing the market’s true strength.
