Silver crashes ₹56000/kg from August peak; gold slides 23000/10 grams. What’s driving the selloff in precious metals

Silver prices showed no signs of recovery as the white metal extended its losing streak in Friday’s trade, falling another ₹6,800 per kg to ₹1,92,800, its lowest level since December 2025.MCX gold prices were also down marginally, declining 0.29%, while hovering around a nearly three-month low of ₹1.40 lakh per 10 grams. Precious metals have faced heavy selling pressure in October as the Middle East conflict showed no signs of easing, keeping the possibility of further US Federal Reserve rate hikes in focus.The weakness has deepened October losses, putting both metals on track for a second consecutive monthly decline. Rising bond yields, driven by elevated crude oil prices, have emerged as a key challenge for precious metals, fueling concerns that the US Federal Reserve could tighten monetary policy further.Last week’s US consumer and producer inflation data came in hotter than expected, largely as energy costs continued to climb.

This has strengthened the case for tighter monetary policy, although Fed officials are still expected to hold rates steady at their October 27–28 meeting.US inflation has remained stubbornly high, prompting the Federal Reserve to raise its short-term interest rate in September for the first time in three years.Gold is traditionally considered a hedge against inflation and a safe-haven asset during geopolitical uncertainty. However, higher interest rates reduce its appeal as investors turn towards yield-bearing assets.Brent crude climbed towards $115 per barrel on Friday, approaching the four-year high of $115.25 reached on May 4. Escalating Houthi attacks on Saudi targets and reports of possible renewed US strikes against Iran have heightened concerns over oil supplies from the Middle East.Market expectations of a rate hike at the Fed’s October 27–28 meeting stood at 9%, while the probability of a hike in December was 81%, according to CME’s FedWatch Tool.

Investors are also awaiting US Personal Consumption Expenditures (PCE) data, the Fed’s preferred inflation gauge, due on October 29 for fresh clues about progress towards its 2% inflation target.The European Central Bank is scheduled to meet on Thursday amid political upheaval in France and an Iran war that has kept energy prices above $100 per barrel, leaving inflation risks elevated.Silver prices extend losing streak; metal crashes ₹56,000 from August peak Considering Friday’s low, silver prices were down 7.5%, putting the metal on track for a fifth consecutive weekly loss. Silver has plunged ₹56,000 from its August peak of ₹2,48,800 per kg. From its record high of ₹4,20,048 per kg, the metal has lost more than half its value.

The sharp correction follows a 170% surge in silver prices in 2025. Gold has also witnessed a steep decline, falling ₹23,000 per 10 grams from August peak of ₹1,64,773. Why are gold and silver prices falling?

Analyst outlook Jateen Trivedi, vice president and research analyst at LKP Securities, said, “Gold continued its downward trend, declining more than 3.5% this week to around ₹1,42,800, as COMEX Gold corrected towards $4,000 amid growing expectations of a US interest rate hike. "Higher rate expectations and elevated bond yields continue to weigh on bullion by increasing the opportunity cost of holding non-yielding assets. Going ahead, the Fed’s policy decision next week will be the key trigger, with the rate outlook and policy guidance likely to determine gold’s near-term direction," he further added.Disclaimer: We advise investors to check with certified experts before making any investment decisions.We advise investors to check with certified experts before making any investment decisions.