Gold prices tumble 6%, silver cracks over 4% as US-China trade deal hopes spark profit booking. What should investors do?

Gold and silver futures opened in the red on the Multi Commodity Exchange (MCX) on Wednesday, October 22 as easing US-China trade tensions presented a compelling opportunity for investors to book profit. The December futures contract for gold opened at Rs 1,20,600 per 10 grams, down over Rs 7,000 or 6%, while silver tanked Rs 6,427 or 4.2% to trade at Rs 1,43,900 per kilogram.

India’s Multi Commodity Exchange (MCX) remained shut during the morning session on Wednesday, October 22, 2025, on account of Diwali Balipratipada. Trading resumed in 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 witnessed since 2020. In the international market, Gold prices extended their decline, retreating further after a record-breaking rally earlier in the week, as traders cashed in gains and sentiment improved on signs of thawing U.S.-China relations.

Spot gold slipped 0.4% to $4,109.19 per ounce, following Tuesday’s steep 5% plunge — the sharpest single-day drop since August 2020. The reversal came after U.S. President Donald Trump signaled optimism about striking a “fair” trade deal with Chinese President Xi Jinping during their meeting next week in South Korea, easing some of the geopolitical jitters that had fueled bullion’s surge.

Even after the selloff, gold remains one of this year’s standout assets, up roughly 56% so far in 2025. The metal hit an all-time high of $4,381.21 per ounce on Monday, powered by relentless central bank buying, global uncertainty, and expectations of further U.S. interest rate cuts.

The correction in gold mirrored a steep selloff in silver, which tumbled nearly 7.5% on Tuesday to about $47.12 per ounce. The drop — one of the metal’s biggest single-day declines in recent years — reflected broad profit-taking across precious and industrial metals amid a stronger U.S. dollar, which typically dampens demand for dollar-priced commodities.Investors are now turning their attention to Friday’s U.S. consumer price index print for September — delayed due to the government shutdown — for more direction on the Federal Reserve’s policy path. Economists in a Reuters poll expect the Fed to deliver a 25-basis-point cut next week, followed by another in December, though opinions remain split on how low rates could go in 2026.

How should you trade gold?

“Festive demand in India continues to lend strength to prices, though post-festive profit booking may emerge as traders lock in gains. The focus this week will remain on the US CPI and Core CPI data, which could guide market expectations on the Fed’s next rate action. The prolonged US government shutdown has also kept a premium built into gold prices, sustaining its safe-haven appeal. The trading range is expected between Rs 1,25,000 and Rs 1,30,000,” Jateen Trivedi of LKP Securities said.

Gold rates in physical markets

Gold Price today in Delhi

Standard gold (22 carat) prices in Delhi stand at Rs 92,440/8 grams while pure gold (24 carat) prices stand at Rs 1,00,832/8 grams.

Gold Price today in Mumbai

Standard gold (22 carat) prices in Mumbai stand at Rs 92,320/8 grams while pure gold (24 carat) prices stand at Rs 1,00,712/8 grams.

Gold Price today in Chennai

Standard gold (22 carat) prices in Chennai stand at Rs 92,320/8 grams while pure gold (24 carat) prices stand at Rs 1,00,712/8 grams.

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