The decline came amid a broader sell-off in technology stocks, driven by concerns over whether heavy investments in artificial intelligence will generate sufficient returns. Gold and silver also entered technically oversold territory, reflecting the intensity of the recent correction.
Rising crude oil prices, fears of persistent inflation and concerns over a possible increase in US interest rates played a significant role in putting pressure on precious metals.
Bas Kooijman of DHF Capital said in a note that expectations of tighter monetary policy continued to weigh on assets that do not generate interest or regular income. He added that stronger oil prices were increasing concerns that inflation could remain elevated for longer, further intensifying the pressure.
A decline in oil prices could ease some of the pressure on gold. However, further supply chain disruptions or stronger-than-expected US employment figures for October could reinforce expectations of tighter monetary policy, potentially keeping gold prices under pressure.
Gold and Silver Record Heavy Monthly Losses
By the end of October, gold prices on COMEX had fallen 7.26 per cent to ,884.9 per ounce. Silver recorded an even sharper decline, falling 19.1 per cent during the month to close at .13 per ounce.
In line with global market trends, precious metals also ended lower in domestic markets. On the Multi Commodity Exchange (MCX), gold declined 7.16 per cent to Rs 1,38,419 per 10 grams. Silver witnessed a steep 20 per cent fall, closing at Rs 1,78,900 per kilogram.
On October 30, gold prices on COMEX fell to a one-year low and closed significantly below the psychologically important $4,000-per-ounce level.
The decline signalled considerable weakness, as gold had also breached its previous support level of $3,900. Prices could now move towards the next support range of $3,650-$3,750 per ounce. For the bearish trend to reverse, gold would need to break above the resistance level of $4,550.
Silver also remained under pressure on COMEX during October, falling below its crucial support level of $54. The breach triggered further losses, with prices touching a low of $48.9 per ounce on Friday.
The short-term outlook for silver remains negative, with prices potentially declining towards the $42-$43 range. A sustained move above the resistance level of $55 would be required to end the prevailing bearish trend.
Gold has fallen 30 per cent since reaching its record high of $5,595 per ounce in January.
According to a Reuters report, concerns that interest rates could remain elevated for an extended period have been a major factor behind the decline. Weak demand in Asia has also added to the pressure on gold prices. However, analysts say central bank purchases typically increase whenever gold falls below $4,000 per ounce.
Silver Faces Additional Pressure From Industrial Demand
Silver is increasingly being viewed as a commodity whose prices depend on industrial growth. According to Reuters, HSBC has said that demand for silver from the industrial and jewellery sectors is declining.
The bank expects silver to average $64 per ounce in 2027, compared with its average price forecast of $71 per ounce for the current year.
Currently, it takes 79 ounces of silver to purchase one ounce of gold, marking the highest gold-to-silver ratio in 11 months. In January, when silver reached its record high of $122 per ounce, just 46 ounces of silver were required to buy one ounce of gold.
Reuters reported that, from a historical perspective, silver could face further declines relative to gold. According to consultancy firm Metals Focus, the gold-to-silver ratio averaged 82 between 2020 and 2025.
What Could Happen to Gold and Silver Prices Next?
Gaurav Arora, Head of Research at financial research institution Sahi, told Live Mint that expectations of higher US interest rates had increased pressure on gold prices.
According to Arora, the US Federal Reserve kept interest rates unchanged in the range of 3.75-4 per cent in October. However, two members of the committee voted in favour of raising rates. Markets have also started factoring in the possibility of another interest rate increase in December.
Arora said gold futures on MCX had witnessed a continuous decline over the past month. The immediate support level for gold currently stands at Rs 1,38,250 per 10 grams. If prices fall below this level, another round of selling could begin.
He added that silver prices generally experience greater volatility, with Rs 1,78,800 per kilogram serving as the immediate support level.
Despite the recent correction, Arora believes the broader trend remains weak. He said investors planning to purchase gold around Dhanteras should consider buying in two or three instalments rather than making a single large purchase. He also advised keeping silver's share in an investment portfolio lower than gold because of its higher price volatility.
Could the Gold Price Correction Offer a Long-Term Buying Opportunity?
Vandana Bharti, Head of Commodity Research at SMC Global Securities, believes the sharp decline in precious metal prices could create buying opportunities for long-term investors.
She referred to previous instances when market-wide selling, driven by liquidity requirements, was followed by a significant increase in physical gold demand.
During the 1970s, gold was trading below $40 per ounce in 1970. By January 1980, its price had climbed to approximately $850 per ounce.
A similar trend was witnessed during the 2008 global financial crisis. When investors were forced to sell their assets to raise cash, gold prices initially declined to around $700 per ounce. However, prices subsequently recovered and reached $1,917 per ounce by August 2011.
Another example came in March 2020, during the market decline triggered by the COVID-19 pandemic. As investors rushed to raise cash, gold prices fell to approximately $1,472 per ounce. Subsequently, investors increased their allocations to physical gold and exchange-traded funds (ETFs), triggering a sharp recovery in prices.
Bharti said these historical examples indicate that buyers looking to invest in precious metals over the long term can become active during periods of market declines caused by liquidity pressures.
She views the recent correction in gold prices as a potential opportunity for gradual buying by investors.
Gold is currently trading at approximately Rs 1.38 lakh per 10 grams in the domestic market. Bharti expects domestic gold prices to reach Rs 1.65 lakh-Rs 1.80 lakh per 10 grams by 2027, supported by central bank purchases, exchange rate fluctuations and gold's role as a hedge against inflation. However, this remains an estimate and is not guaranteed.
What Are COMEX, MCX and Futures Rates?
COMEX is a major US marketplace where gold and silver contracts are traded. Futures rates refer to the prices at which buyers and sellers agree today to enter into contracts for delivery in a particular future month.
This does not mean that gold or silver will necessarily trade at the same price when that delivery month arrives.
COMEX gold futures are widely used as an important benchmark for international gold prices. COMEX can be understood as an organised wholesale marketplace rather than a jewellery shop. It is part of CME Group's exchange operations, where standardised contracts for commodities such as gold and silver are traded.
What Does the Gold Futures Rate Mean?
Consider a hypothetical example in which December gold futures are trading at $4,000 per ounce.
This means traders can currently buy or sell standard gold contracts linked to December at that price. It does not mean gold will definitely be worth $4,000 per ounce in December.
The concept can be understood through an example involving a buyer and a supplier. They agree today on the price at which goods will be supplied in the future. They are fixing the transaction price under the contract, not predicting that the same price will prevail everywhere in the market.
Why Is COMEX Important for Gold Prices in India?
COMEX provides an important benchmark for international markets, while MCX is India's exchange for gold and silver futures trading.
The prices quoted in US dollars on COMEX are not the same as retail jewellery prices in India or the prices quoted in rupees on MCX.
Difference Between COMEX and Futures Rates
COMEX is a marketplace, whereas a futures rate is the price quoted for a contract traded in that marketplace.
This can be understood through the example of a vegetable market. The market is the place where transactions take place, while Rs 30 per kilogram is the price of a particular vegetable.
Similarly, COMEX is an exchange, while a quotation such as December gold at $4,000 per ounce represents a futures price.
What Is the Difference Between MCX and COMEX?
Both MCX and COMEX are marketplaces where commodities such as gold and silver are traded.
The simplest difference is that MCX is based in India and quotes prices in Indian rupees, while COMEX is based in the United States and quotes prices in US dollars. Futures contracts are traded on both exchanges.
Consider two hypothetical market quotations: gold at $4,000 per ounce on COMEX and gold at Rs 1,20,000 per 10 grams on MCX.
These represent gold prices in two different markets, expressed in different currencies and weight units.
The two figures cannot be compared directly. It is similar to comparing petrol prices quoted in dollars per gallon with prices quoted in rupees per litre.
Investors must also check whether the delivery months of the two futures contracts are the same before comparing their prices.
Does MCX Follow COMEX?
The two markets are interconnected, but their prices do not necessarily move by exactly the same percentage.
Gold prices in India depend not only on international market rates but also on the rupee-dollar exchange rate and other domestic market factors.
If international gold prices rise, MCX gold prices will generally also face upward pressure.
However, if international gold prices remain stable while the rupee weakens against the US dollar, gold will become more expensive in rupee terms.
COMEX provides an indication of international gold prices, while MCX reflects prices in India's futures market. Neither of these prices is necessarily the same as the final price quoted by jewellers to customers.
With gold and silver witnessing substantial monthly losses, investors are now assessing whether the correction signals further weakness or offers an opportunity for long-term accumulation. The immediate direction will depend on support levels, inflation trends, crude oil prices, US monetary policy expectations and demand from industrial buyers and central banks.
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