October 18, 2025 | New York: The gold prices and silver markets saw their sharpest one-day declines in years on Friday, breaking a months-long rally that had pushed both metals to record highs. Analysts attribute the sudden downturn to a wave of profit-taking, easing geopolitical tensions, and a stronger U.S. dollar.
According to data from the COMEX division of the New York Mercantile Exchange, gold futures for December delivery fell by nearly 4.8%, closing at $4,015 per ounce, while silver futures plummeted 6.3% to $52.40 per ounce. This marks the steepest daily loss for gold since 2020 and one of the largest for silver since 2013.
What Triggered the Sharp Fall in Gold Prices?
The question dominating investor circles now is: “Why is gold down today?” After months of steady gains, experts say the latest drop in gold prices was fueled by a combination of macroeconomic and sentiment-driven factors.
- Profit Booking at Record Levels
Investors rushed to lock in gains after gold touched an all-time high earlier this week near $4,250 per ounce. The rally had been supported by strong safe-haven demand amid U.S.–China trade tensions and uncertainty over global interest rate policies. - Rising U.S. Dollar and Treasury Yields
A stronger dollar and rebounding bond yields typically weigh on gold and silver, as both are non-yielding assets. The U.S. dollar index rose 0.7%, while 10-year Treasury yields climbed back above 4.2%, reducing gold’s relative appeal. - Easing Geopolitical Concerns
The recent de-escalation in Middle Eastern tensions and improved trade dialogue between Washington and Beijing have also reduced the urgency for investors to hold safe-haven assets like gold. - Market Correction After an Overextended Rally
Analysts have long warned that the precious metals market was due for a correction after a parabolic rise over the past six months. The selloff, while sharp, is being viewed by many as a healthy pullback rather than a trend reversal.
Silver Suffers Even Larger Blow
While gold prices dropped sharply, silver experienced even more significant losses due to its dual role as both a precious and industrial metal. Silver futures fell to $52.40 per ounce, erasing nearly $5 in value in a single trading day.
Experts say the industrial slowdown in China, combined with the selloff in commodities, contributed to silver’s steeper fall. However, with long-term demand from the solar and electronics sectors still strong, analysts expect silver to find support near $50 per ounce.
Gold Futures Outlook: Analysts See Opportunity in the Pullback
Despite the sudden dip, analysts remain cautiously optimistic about the gold futures outlook for late 2025 and early 2026. Many expect gold prices to stabilize above $3,900 and possibly resume an upward trend if the U.S. Federal Reserve signals rate cuts or inflation remains persistent.
Daniel Hynes, senior commodities strategist at ANZ, stated:
“This correction was overdue. The fundamentals for gold — inflation risk, debt concerns, and central bank buying — remain supportive in the long run.”
Global central banks, including those in China and India, have been increasing their gold reserves, which is likely to provide a safety net against deeper price drops.
Retail Demand in India and China
In India, the world’s second-largest consumer of gold, the price correction may spark renewed retail buying, especially with the Dhanteras and Diwali festivals approaching. Local jewellers such as Tanishq and Kalyan Jewellers are already witnessing increased inquiries as buyers take advantage of lower rates.
Meanwhile, in China, demand remains resilient despite economic uncertainty, as gold continues to be viewed as a stable store of value.
The Broader Precious Metals Picture
While both gold and silver suffered steep declines, experts caution against panic selling. Historically, similar corrections have been followed by strong rebounds once investor sentiment stabilizes.
The ongoing volatility reflects the broader tug-of-war between safe-haven demand and economic optimism — two opposing forces that will likely shape metal prices heading into 2026.
As traders reassess the market, investors are being advised to watch key levels:
- Gold support zone: $3,950–$3,900 per ounce
- Silver support zone: $50–$48 per ounce
Despite the sudden downturn, gold prices remain up nearly 38% year-to-date, while silver has gained over 45%, underscoring the strength of the broader 2025 rally.
Analysts agree that while the latest drop may feel dramatic, it offers long-term investors a chance to re-enter the market at more sustainable levels.
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