The October FOMC meeting is now over, and gold prices are under slight pressure. Fed Chair Jerome Powell announced a quarter-point reduction but downplayed the possibility of another cut in December due to policymakers’ disagreements and inadequate federal data from the government shutdown.
Gold price fell below the $4,000 per ounce threshold again. On Thursday, gold traded around $3,961 after the US Fed’s FOMC meeting, where a 25-basis-point rate cut was announced as expected.
Silver also fell below $48 mark to trade around $47.77 per ounce on Thursday, after having recovered from one-month lows in what appears to be a technical rebound.
Gold prices are projected to test support just below $5,000 an ounce by next year, as indicated by the sentiment at the 2025 London Bullion Market Association (LBMA) Global Precious Metals Conference. A survey conducted during the conference revealed that delegates expect gold prices to rise to $4,980.30 an ounce, reflecting a 25% increase from current levels, as reported by KITCO.
After making two double tops in quick time, gold prices had crashed last week. Gold reached an all-time high of 4381.58 in October.
Last week, Silver also saw selling pressure as the price fell below $47 per ounce. 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 1,19,780. After reaching to all-time high level of around Rs 1,30,620 on October 20, the price has fallen by about Rs 9,500 or 7% from the 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.
Gold gets support from a lower interest rate scenario. Indications from Fed chair Powell regarding aggressive rate cuts could have led to a rally in gold prices, but the hawkish stance resulted 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.
