7 months ago
Gold and Silver Prices Plunge After Historic Rally
Gold and silver prices dropped a lot after they had been very high.
Some people think this is because rich people sold a lot of their investments at once, which made the prices go down quickly.
Others think it's because the new leader of the Federal Reserve, Kevin Warsh, might be causing some changes in the market.
China even stopped trading in some funds to try to control the big changes in prices.
It's all a bit confusing, but it shows how money can move around quickly in the market.
The prices fell a lot in different places, like the international market and in India.
Some experts say that even though the prices went down a lot, it's not a bad time to keep investing in these metals.
The Indian rupee also got weaker because of these price changes and a stronger dollar.
The central bank tried to help by selling dollars, but the rupee is still close to a record low.
Gold prices plummeted 11.8% in the international market and 14.73% in MCX, falling from an all-time high of $5,600 to $4,995 per ounce.
Silver prices fell 21% in the international market and 20.96% in MCX, dropping from $125 to $98 per ounce.
The price drops were attributed to profit-making, a rebound in the US dollar, and the appointment of Kevin Warsh as the new Fed chair.
There is speculation of market manipulation, including market spoofing and forced liquidation by the ultra-wealthy.
Gold and silver ETFs also saw significant drops, with SilverBees ETF down 18.59% and GoldBees ETF down 10.52%.
The gold-silver ratio compressed to around 50, indicating silver is no longer cheap relative to gold.
Silver's volatility has been nearly double that of gold since 2020, with wider daily swings and deeper drawdowns.
Despite the correction, silver's rally has been underpinned by strong fundamentals, including geopolitical shocks, supply deficits, and a shift toward safe-haven assets.
Global silver ETFs saw outflows of over 3 million ounces since 2026, while gold ETFs saw steady inflows.
The Indian rupee neared 92/$ due to high precious metal prices and a stronger dollar, with the RBI intervening to prevent further depreciation.
- Who
- Analysts, retail investors, institutional investors, ultra-wealthy, market makers, banks, US President Donald Trump, Kevin Warsh, Ajay Kedia, Saumil Gandhi, Kaynat Chainwala, Vijay Kuppa, Hareesh V, Dr. Renisha Chainani, Prithviraj Kothari, Satish Dondapati, Nikunj Saraf, Amit Pabari
- What
- Gold and silver prices fell after a historic rally, with speculation of market manipulation
- Where
- Global markets, with specific mention of China's response, MCX, Delhi spot market, Mumbai spot market, COMEX
- When
- Timing of the crash is noted as convenient, but no specific date is provided
- Why
- Reasons include profit-making, a slight rebound in the dollar, market spoofing, and forced liquidation by the ultra-wealthy, overbought territory, and the appointment of Kevin Warsh as Fed chair, high prices of precious metals creating downward pressure on the rupee, stronger dollar, margin pressure, profit-booking at higher levels, weakness in the equity market, hawkish Fed chair pick under President Trump
Key facts
- Gold Price Drop
- 11.8% in international market, 14.73% in MCX, Rs 14,000 per 10 gm in Delhi spot market
- Silver Price Drop
- 21% in international market, 20.96% in MCX, Rs 20,000 per kg in Delhi spot market
- New Fed Chair
- Kevin Warsh
- Previous Fed Chair
- Jerome Powell
- Market Manipulation Allegations
- Speculation of market spoofing and forced liquidation
- China's Response
- Halted trading in five commodity funds
- Wealth Distribution
- Top 10% hold 93% of US households' stock market wealth (Oxfam)
- Gold ETFs Drop
- GoldBees ETF down 10.52%, AxisGold down 12.53%
- Silver ETFs Drop
- SilverBees ETF down 18.59%, SBIsilver down 20.5%, Axisilver down 20.16%
- Gold-Silver Ratio
- Compressed to around 50, indicating silver is no longer cheap relative to gold
- Silver Volatility
- Nearly double that of gold since 2020
- Silver Fundamentals
- Strong due to geopolitical shocks, supply deficits, and safe-haven asset shifts
- ETF Flows
- Global silver ETFs saw outflows of over 3 million ounces since 2026, while gold ETFs saw steady inflows
- Rupee Depreciation
- Indian rupee neared 92/$ due to high precious metal prices and a stronger dollar
- RBI Intervention
- RBI sold dollars to prevent further rupee depreciation
Timeline
Trump picks Fed chair, revealing choice early.
Then, he names successor, signaling rate cuts.
In response, markets brace for lower rates.
Gold, silver prices plummet after historic highs.
Mass selling, market shifts suspected causes.
Quotes
JM Financial Services
A financial services and brokerage firm
“silver has become extremely hard to read at current levels”
NDTV
Saumil Gandhi
Commodity analyst at HDFC Securities
“the decline was driven by a toxic mix of stretched technicals, institutional profit booking, and a strengthening dollar, a combination that rarely ends gently.”
opindia.com
Amit Goel
Chief Global Strategist at Pace 360
“If gold prices fail to regain the $4,900-per-ounce level on Monday, we can assume the precious metal has topped out. After topping out, gold prices are expected to touch $3,800 per ounce by the end of October 2026. This fall may not be one directional, and the precious yellow metal is expected to reach this level, doing a dead-cat bounce from every new low.”
livemint.com
Sources
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