Gold and silver prices have fallen sharply in October 2025 after reaching record highs earlier this month. The drop is primarily due to profit booking, a stronger U.S. dollar, and reduced safe-haven demand following easing global tensions and better market sentiment.
Key Reasons for the Fall
- Profit-taking after record highs
Both metals had risen dramatically through 2025—gold by nearly 60% and silver by 80%—creating an overbought market. Investors are now booking profits after this extraordinary rally, triggering a steep correction. - Strengthening U.S. dollar
The U.S. dollar index (DXY) has strengthened to near one-week highs, making dollar-denominated commodities like gold and silver more expensive for international investors. This has caused additional selling pressure. - Reduced safe-haven demand
Optimism over upcoming U.S.-China trade talks and easing concerns about a potential U.S. government shutdown have reduced the need for safe-haven assets. As geopolitical risks ease, investors are shifting funds toward equities and riskier assets. - Technical correction
Analysts note that gold and silver prices had entered overbought territory, with momentum indicators flashing correction signals. This has led to algorithmic and institutional selling to adjust exposure. Seasonal weakness post-festival buying
In India, a major bullion market, Diwali-season demand has cooled after advance festival purchases. This, combined with high global prices, has weighed on local buying interest.
Summary
In essence, the fall in silver and gold is a healthy correction following unsustainable highs. It’s driven by profit-taking, a rising dollar, and reduced fear-based demand amid improving trade and political conditions. Analysts expect prices to remain volatile but range-bound between USD 4,000–4,500 for gold in the near term
