Gold prices plunge 6%, silver crashes more than 4% as the US-China trade deal hopes to make gains. What should investors do?

Gold and silver futures opened in the red on Wednesday, October 22, on the Multi Commodity Exchange (MCX), as easing trade tensions between the US and China presented investors with an attractive opportunity to book profits. The December gold futures contract opened at Rs 1,20,600 per 10 gram, down above Rs 7,000 or 6%, while silver fell Rs 6,427 or 4.2% to trade at Rs 1,43,900 per kilogram.

The Indian Multi Commodity Exchange (MCX) remained closed during the morning session on Wednesday, October 22, 2025, on account of Diwali Balipratipada. Trading resumed during the evening session from 5:00 PM to 11:30 PM.

The downturn in precious metals comes after international markets posted a sharp slump, the worst since 2020. In the international market, gold prices continued their slide and retreated further after a record rally earlier this week as traders cashed in their gains and sentiment improved after signs of thawing US-China relations.

Spot gold fell 0.4% to $4,109.19 an ounce, following Tuesday’s steep 5% decline – the sharpest one-day decline since August 2020. The reversal came after US President Donald Trump expressed optimism about striking a “fair” trade deal with Chinese President Xi Jinping during their meeting next week in South Korea, boosting some of the geopolitical jitters that had fueled the bullion’s rise were eased.

Even after the sell-off, gold remains one of this year’s standout assets, up about 56% so far in 2025. The metal hit a record high of $4,381.21 an ounce on Monday, driven by ruthless central bank buying, global uncertainty and expectations of further U.S. interest rate cuts.

The correction in gold reflected a sharp sell-off in silver, which fell nearly 7.5% to around $47.12 an ounce on Tuesday. The decline – one of the biggest single-day declines in recent years – reflected broad profit-taking in precious and industrial metals amid a stronger US dollar, which typically dampens demand for dollar-priced commodities. Investors are now turning their attention to Friday’s U.S. Consumer Price Index for September – postponed due to the government shutdown – to provide further guidance on the Federal Reserve’s policy path. Economists in a Reuters poll expect the Fed to make a 25 basis point cut next week, followed by another cut in December, although opinions remain divided on how low rates could go in 2026.

How should you trade gold?

Festive demand in India continues to bolster prices, although post-festive profit booking may emerge as traders hold on to gains. The focus this week will remain on the US CPI and Core CPI data, which could drive market expectations of the Fed’s next rate move. The prolonged US government shutdown has also maintained a premium in gold prices, maintaining safe-haven appeal. trading margin is expected between Rs 1,25,000 and Rs 1,30,000,” said Jateen Trivedi of LKP Securities.

Gold rates in physical markets

Gold Price Today in Delhi

The standard gold price (22 carat) in Delhi is Rs 92,440/8 gram while the price of pure gold (24 carat) is Rs 1,00,832/8 gram.

Gold Price Today in Mumbai

The standard gold price (22 carat) in Mumbai is Rs 92,320/8 gram while the price of pure gold (24 carat) is Rs 1,00,712/8 gram.

Gold Price Today in Chennai

The standard gold price (22 carat) in Chennai is Rs 92,320/8 gram while the price of pure gold (24 carat) is Rs 1,00,712/8 gram.

(Disclaimer: Recommendations, suggestions, views and opinions expressed by the experts are their own. These do not represent the views of The Economic Times)