• Gold and silver plunged after record highs, marking their sharpest single-day drops in over a decade.
• A stronger dollar, renewed US-China trade optimism, and India’s waning demand triggered a swift reversal in precious metals.
• Market uncertainty deepened as the US government shutdown halted key trader positioning data, fueling volatility and speculative swings.

Gold

Both Gold and Silver hit record drops after weeks-long rally that sent both precious metals to successive record highs.

Gold bullion prices fell by 6.3% reaching USD 4,410/oz after reaching a record high of USD 4,381.52. This is the most Gold dropped in the last 12 years after weeks that sent the precious metal to record highs. Meanwhile, silver bullion prices fell by 8.7%, hitting USD 47.87/oz after reaching a record high of USD 52.32/oz. This is the steepest single-day drop since 2021 after surging nearly 80% this year. 

Precious Metals

Silver’s recent moves have been even more dramatic than gold. This due to a historic squeeze in the London market last week driving prices beyond the record set in 1980. Due to silver being used in a religious festival in India, the country’s largest precious metal refinery ran out of its silver stock for the first time in its history. This was coupled by international investors and hedge funds piling into precious metals betting on the fragility of the US dollar. This frenzy rippled across to the London silver market, where global prices are set and where the world’s biggest banks buy and sell in huge quantities. Thus, silver reached record highs before suddenly tumbling.

There are a multitude of factors that drove the precious metals to hit record drops. This includes positive trade talks between China and the US, a stronger dollar, and overstretched technicals. It also includes uncertainty on investor position due to the US government shutdown and the end of seasonal buying spree in India.

The biggest indicator that led to the drop is the set meeting between US US President Donald Trump and China’s Xi Jinping. Both leaders intend to meet to discuss their differences on trade. Additionally, the strengthening US dollar has made precious metals more expensive for most buyers. 

The US government shutdown has meant that traders have been left without their weekly report from the Commodity Futures Trading Commission. This report indicates how hedge funds and other money managers are positioned in US gold and silver futures. Thus, without the data,  speculators might base their positions any which way more.

This a story of how a perfect storm of events led to a tumultuous series of highs and lows for the precious metals market.