Gold and silver prices continued to decline on Thursday, extending losses after witnessing one of their steepest drops in years earlier this week. The fall follows an extended rally that pushed both metals to record highs, prompting widespread profit booking amid global market caution.
Gold prices edge lower amid investor caution
In early trade on Thursday, spot gold slipped 0.3% to $4,082.95 per ounce as of 1:44 a.m. GMT, while U.S. gold futures for December delivery rose marginally by 0.8% to $4,097.40 per ounce. The yellow metal had already seen its sharpest single-day fall in more than a decade on Tuesday, reflecting investor nervousness ahead of crucial U.S. economic data.
A stronger U.S. dollar index, which edged up by 0.1% against major currencies, also weighed on gold prices by making the metal more expensive for holders of other currencies. Analysts said traders were waiting for the upcoming U.S. Consumer Price Index (CPI) data for September, delayed due to a government shutdown. The report, expected on Friday, is likely to show core inflation steady at 3.1%.
Inflation and interest rate outlook weigh on sentiment
The CPI report is considered critical for shaping expectations around the Federal Reserve’s next interest rate decision. Markets have already priced in a 25-basis-point rate cut at the Fed’s meeting next week.
Lower interest rates typically benefit gold by reducing the opportunity cost of holding non-yielding assets like bullion. However, the short-term volatility suggests that traders are cautious about overextended prices following the rally. “We are seeing natural correction after a strong upward trend. Investors are rebalancing portfolios ahead of the Fed announcement,” said a Mumbai-based commodities analyst.
Geopolitical developments influence precious metals
Market sentiment was also influenced by global developments. U.S. President Donald Trump said he expected to meet Chinese President Xi Jinping next week in South Korea to discuss trade ties and China’s oil purchases from Russia.
Meanwhile, Russia confirmed it was preparing for a possible summit between President Vladimir Putin and Trump, a move that investors are watching closely for its potential impact on global trade and energy markets.
Such geopolitical factors have historically supported gold prices, as investors seek safe-haven assets during periods of uncertainty. However, the latest correction indicates that traders are balancing between safety demand and profit realisation.
Gold’s rally still among 2025’s strongest
Despite the correction, gold remains one of 2025’s best-performing assets, having risen nearly 56% since January to hit an all-time high of $4,381.21 per ounce on Monday. The surge was fuelled by global economic uncertainty, central bank purchases, and expectations of monetary easing.
However, holdings in the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.59% to 1,052.37 metric tons on Wednesday from 1,058.66 tons the previous day. The decline signals mild institutional outflows, suggesting that large investors are locking in profits.
Silver, platinum and palladium follow suit
The downturn in gold also affected other precious metals. Spot silver slipped 0.4% to $48.31 per ounce, extending losses after touching record highs earlier this month. Platinum dropped 1.4% to $1,598.65 per ounce, while palladium fell 1.4% to $1,438.47 per ounce.
Experts note that silver’s sharper correction stems from its dual nature as both an investment and industrial metal. “Weak manufacturing demand and profit booking after recent highs have driven silver lower,” said a senior analyst from a leading brokerage.
Domestic impact and future outlook
In India, bullion prices are expected to remain sensitive to global market trends, rupee fluctuations, and post-festive season demand. Local traders anticipate subdued retail buying until prices stabilise.
Analysts remain positive on gold’s long-term outlook, citing continued central bank accumulation and global uncertainty. However, they caution short-term investors to brace for volatility as markets digest U.S. inflation data and central bank policy cues.