Precious Metals Retreat

Gold and Silver Futures Experience Pullback After Record Highs

Gold and silver futures experienced a decline in late trading, attributed to investors securing profits after a period of significant rallies that propelled both precious metals to new all-time highs. Despite the downturn, market analysts suggest that this selling pressure is unlikely to evolve into a sustained trend reversal.

Peter Cardillo of Spartan Capital Securities advises investors to consider purchasing opportunities during further price dips. He views the current decline as a necessary correction that may be temporary.

• Front-month gold futures decreased by 2.4% to settle at $3,946.30 a troy ounce.
• Silver futures dropped by 3.7% to $46.85 a troy ounce.

Comex Gold Settles Lower

The front-month Comex gold contract for October delivery experienced a notable decrease, losing $97.00 per troy ounce, or 2.40%, to settle at $3946.30.

• This marks the largest single-day dollar decline since Monday, May 12, 2025.
• It also represents the largest single-day percentage decline since Monday, August 11, 2025.
• Despite the decline, it was the fourth-highest closing price in history.
• The decline interrupts a four-session winning streak.
• Today's settlement value is the fourth highest this year.
• The price is up 53.81% from its 52-week low of $2565.70, reached on Friday, November 15, 2024.
• It has risen 50.59% from its value 52 weeks ago.
• It's up 49.57% from its 2025 settlement low of $2638.40, recorded on Monday, January 6, 2025.
• Month-to-date, it is up 2.75%.
• Year-to-date, it has increased by $1317.10, or 50.10%.

Comex Silver Declines

The front-month Comex silver contract for October delivery also experienced a significant drop, losing $1.8060 per troy ounce, or 3.71%, to settle at $46.850.

• This represents the largest single-day dollar and percentage decline since Friday, April 4, 2025.
• The price has declined in two of the past three sessions.
• Today's settlement value is the sixth highest this year.
• It marks the lowest settlement value since Thursday, October 2, 2025.
• The price is off 3.71% from its 52-week high of $48.656, reached on Wednesday, October 8, 2025.
• It is up 61.89% from its 52-week low of $28.94, recorded on Tuesday, December 31, 2024.
• It has risen 51.10% from its value 52 weeks ago.
• It's off 3.71% from its 2025 settlement high of $48.656, reached on Wednesday, October 8, 2025.
• It's up 60.91% from its 2025 settlement low of $29.116, recorded on Friday, April 4, 2025.
• It's off 3.80% from its record high of $48.70, reached on Thursday, January 17, 1980.
• Month-to-date, it is up 1.29%.
• Year-to-date, it has increased by $17.91, or 61.89%.

Gold Rally Supported by Central Bank Activity

Despite the recent dip, gold's overall strength remains underpinned by fundamental factors. Russell Price of Ameriprise attributes the metal's strength to global central banks diversifying their reserves by replacing U.S. Treasurys with gold, citing China as an example. This shift is seen as a strategy to bolster the credibility of their currency, central bank, and financial system.

Price also suggests that concerns surrounding the U.S. budget deficit may be impacting demand for long-term Treasurys. He notes that a weaker dollar and falling interest rates in Europe and Japan are preventing Treasurys from rapidly losing value.

Geopolitical Tensions and Profit-Taking Impact Gold Prices

Gold prices experienced slight pressure due to easing geopolitical risks in the Middle East and profit-taking activities. Futures in New York were down 0.3% to $4,059 a troy ounce.

Analysts at Saxo Bank noted that strong ETF inflows, momentum, and fear-of-missing-out (FOMO) driven buying have pushed prices into technically overbought territory, prompting some short-term caution.

However, the precious metal continues to find support from its role as a safe-haven asset amid growing political uncertainties, expectations of further U.S. interest rate cuts, and ongoing central bank buying. Silver futures also traded lower, down 0.9% to $48.55 an ounce.

Gold's Continued Proximity to Record Highs

Even with the slight pullback, gold prices remain near record highs, reflecting continued investor demand amid economic and political uncertainty. Concerns over the U.S. economy and the government shutdown contribute to this demand.

Analysts at ANZ Research highlight that strong ETF inflows and expectations of further interest rate cuts by the Federal Reserve are supporting prices, with major Wall Street banks predicting further upside potential for gold.

Copper Prices Rise Amid Supply Concerns

Copper prices are experiencing upward momentum due to supply concerns stemming from reduced production guidance from Teck Resources, a Canadian mining giant. Challenges at its mine in Chile have led to concerns about global copper supply.

Futures on the London Metal Exchange rose 1.6% to $10,874 a metric ton, reaching their highest level since May 2024.

ING analysts point out that copper has surged around 23% this year due to supply disruptions at major mines, which outweigh weak demand in major industrial economies.

The International Copper Study Group forecasts a supply deficit of 150,000 tons next year, a significant shift from previous estimates of a 209,000-ton surplus. The group also narrowed its 2025 surplus estimates to 178,000 tons from 289,000 tons earlier.

Unlimited Potential for Gold Prices?

The question of whether gold prices have further room to run is a topic of ongoing debate. Ipek Ozkardeskaya, senior analyst at Swissquote Bank, suggests that unlike equities, traditional valuation ratios do not apply to gold. Gold's value is derived from investor belief and perception.

Ozkardeskaya argues that if Bitcoin can trade above US$120,000, then gold also possesses endless upside potential. She maintains a positive medium-term outlook for gold, with many investors anticipating a move towards $5,000 and beyond.

Gold Dips on Potential Profit-Taking

Gold prices experienced a decline in early Asian trade, potentially driven by profit-taking after a significant rally that saw front-month gold futures gain 1.7% to close at $4,043.40/oz, a new record.

Bart Melek of TD Securities suggests that the speed and magnitude of gold's rally since mid-August could tempt commodity trading advisors and other investors to secure profits. He notes that the precious metal appears overbought, implying that any factors questioning the pace of Federal Reserve easing or an increase in volatility could trigger a significant downside correction. Spot gold is currently 0.6% lower at $4,017.20/oz.