Gold and Silver Prices Plummet Nearly 10% Amid Trade Deal Optimism and Fed Watch

**Gold and Silver Prices Crash by 10% from Peaks

**Gold and silver prices have seen a significant decline, with gold falling by nearly 10% from its all-time high of $4381.58 to trade around $3,941. In India, gold prices have dropped by approximately Rs 12,000, or 10%, from their record high of Rs 1,30,620 on October 20th. Silver also faced selling pressure, falling below $47 per ounce and experiencing a more than 6% drop last week.

These precious metals had previously seen substantial gains in 2025, with gold prices increasing by nearly 50% and silver by 60%, driven by economic and geopolitical uncertainties and strong central bank purchases. The recent selling pressure is largely attributed to increased optimism surrounding a potential US-China trade deal, which has diminished the demand for gold and silver as safe-haven assets. Market participants are anticipating a trade breakthrough following recent talks between US and Chinese trade representatives.

**Impact** This sharp correction can impact investors' portfolios, especially those heavily invested in gold and silver. It suggests a shift in market sentiment from safe havens to riskier assets like stocks, which are reaching new highs. The upcoming US Federal Open Market Committee (FOMC) meeting, where a 25-basis-point rate cut is anticipated, could also influence gold prices. A dovish stance from the Federal Reserve might support gold, while a hawkish stance could lead to further sell-offs. Experts anticipate consolidation and volatility, which could set the stage for the next upward trend. The impact on the Indian stock market is moderate, primarily affecting commodity-linked sectors and investor sentiment towards safe assets. Rating: 7/10

**Definitions** * **Double Tops**: A technical analysis pattern indicating a potential reversal in an asset's price trend after failing to break above a resistance level twice. * **Profit-taking**: The act of selling an asset after its price has risen significantly, in order to secure the profits made. * **Safe-haven asset**: An investment that is expected to retain or increase its value during times of market turbulence or economic uncertainty. * **Overvaluation**: When an asset's price is higher than its intrinsic or fundamental value, suggesting it might be due for a correction. * **Basis-point**: A unit of measure used in finance to denote the change in a financial instrument's value. One basis point is equal to 0.01% (1/100th of a percent). * **FOMC**: Federal Open Market Committee. This is the monetary policymaking body of the Federal Reserve System, the central bank of the United States. * **Hawkish stance**: Refers to a monetary policy stance that favors higher interest rates to control inflation, even at the risk of slowing economic growth.