Gold prices have fallen for the first time in nine weeks, driven by easing trade-war fears and expectations of a US interest rate cut.
Mumbai: Gold prices started declining on Friday, October 24, ending a nine-week streak of gains, as investors reacted to potential developments in the US-China trade dispute and expectations of a Federal Reserve rate cut.
Bloomberg reported that gold slipped to around $4,112 per ounce, marking a weekly decline of approximately 3 per cent — the largest since May.
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Record highs followed by sharp correction
The rise in gold prices began in August, reaching a record $4,381.52 per ounce earlier this month. However, a sharp drop on October 21 followed significant outflows from gold-backed exchange-traded funds (ETFs). Saxo Capital Markets strategist Charu Chanana noted that while the correction appears to be stabilising, “broader retail participation means volatility is likely to remain elevated.”
Trade optimism eases safe-haven demand
The anticipated breakthrough in US-China trade talks has reduced demand for gold as a safe-haven asset. Investors are also factoring in a potential 25 basis-point Fed rate cut, particularly after September’s Consumer Price Index (CPI) showed 3.1 per cent inflation.
Gold and silver prices in India
As of Sunday, October 26, 2025:
- 10 grams of 24-carat gold: Rs 1,26,960
- 10 grams of 22-carat gold: Rs 1,15,550
- 1 kg of silver: Rs 1,53,700
Both gold and silver are lower than recent record highs, with the decline attributed to profit booking, a stronger US dollar, and easing global uncertainties.
Factors driving the correction
Gold prices are experiencing a notable correction due to several key factors:
- Reduced safe-haven demand following optimism over US-China trade.
- Profit booking from large gold-backed ETFs.
- Expectations of a Federal Reserve rate cut, already priced in by investors.
- Appreciation of the US dollar, making gold more expensive for international buyers.
Silver mirrors gold’s trend
Silver has followed a similar path, falling sharply from record highs due to speculative trading and profit booking. Experts suggest that while short-term volatility remains high, both gold and silver may stabilise once global trade developments and economic indicators become clearer.
What investors should watch
Investors are advised to monitor: CPI data for inflation trends, US-China trade developments and Global currency movements.
These factors are likely to influence precious metal trends in the near future.
(Disclaimer: The information provided in this article is for informational purposes only and should not be considered as investment, trading, or financial advice. All investment instruments, including stocks, mutual funds, cryptocurrencies, real estate, and precious metals like gold and silver, are subject to profit and loss. Mathrubhumi is not responsible for any gains or losses arising from investments based on this information. Readers are advised to consult certified financial advisors before making any investment or trading decisions.)
Published: 26 Oct 2025, 07:29 am IST
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