The price of each ounce of gold for immediate delivery fell by 3.5% to $3,880.97, marking the lowest level since October 2025. In the U.S. futures market, the price of each ounce of gold for December delivery also closed down by 3.3% at $3,898.90.
Silver's Plunge and Market Concerns
The price of each ounce of silver dropped by 6.5% to $49, falling below $50 for the first time in 11 months. Tai Wang, an independent metals trader, stated, "The situation is chaotic." He added, "Precious metals cannot escape the pressure from the severe correction in the stock market." Corporate earnings have been the main driver of growth in AI-related stocks, but now this foundation shows signs of weakness.
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Analysts and Future Predictions
Analysts at Commerzbank stated in a note that the sharp decline in technology stocks on Friday may have led to forced selling of safe assets like gold and also margin calls from investors. However, they expect the precious metals market to improve in the future.
Since hitting a historic high of $5,595 in January, gold prices have dropped by 30% due to expectations of sustained high interest rates and reduced demand in Asia. Analysts noted that whenever the price of gold falls below $4,000, central bank demand for purchasing this precious metal increases.
In contrast, three precious metals including silver, platinum, and palladium lack the support of central bank purchases and investment demand for safe assets, which have contributed to the rise in gold prices in recent years. The 7% to 9% drop in the price of each ounce of silver, platinum, and palladium last week has pushed their relative strength index into deep oversold territory.
HSBC has announced that industrial and jewelry demand for silver is declining and has forecasted the average price of each ounce of silver at $64 in 2027. Currently, to buy one ounce of gold, one must pay for 79 ounces of silver, the highest ratio in 11 months.
In the market for other precious metals, the prices of platinum and palladium have also reached their lowest levels in 13 and 17 months, respectively. The drop in the price of each ounce of palladium below $1,000 has raised the gold-to-platinum price ratio to 2.7, the highest level since mid-2025.
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