Gold and silver prices tumbled for a second consecutive day on Wednesday (Oct. 22), halting a months-long rally that had driven the precious metals to record highs. The decline came as investors took profits amid signs of easing US-China tensions and a stronger US dollar.
Gold, which has soared more than 60 percent this year, hit an intraday low of US$4,000 an ounce, a sharp drop from Tuesday’s record of US$4,381.51. Silver, which had closely followed gold’s upward trend, also suffered steep losses.
The sell-off spilled over to mining stocks. Northern Star Resources in Sydney fell over 8 percent, Perseus Mining slid more than 6 percent, Zijin Gold International in Hong Kong shed over 4 percent, and Merdeka Copper Gold in Jakarta fell around 4 percent.
“Gold’s glorious charge finally met gravity,” said Stephen Innes of SPI Asset Management. “After months of one-way conviction and relentless inflows, the metal took a 6 percent cliff dive. Volatility in gold has now surpassed equities, echoing the pandemic’s manic heartbeat.”
However, analysts said the retreat may be a healthy correction rather than the end of the rally.
“None of this means the precious metals story is over,” noted Charu Chanana of Saxo Markets. “These are healthy developments, helping to cool what had become an overheated trade and preventing the rallies from turning into a bubble.”
The dip in gold matched weakness in equity markets across Asia after two days of strong gains. Stocks in Hong Kong, Shanghai, Sydney, Wellington, Taipei, and Manila fell, while Singapore, Seoul, and Jakarta posted modest gains. Tokyo closed flat after early losses, while London opened higher but Paris and Frankfurt edged down.
Investor sentiment was also swayed by comments from US President Donald Trump, who said he expected to reach a “good” trade deal with Chinese President Xi Jinping at next week’s APEC summit in South Korea—but also cautioned the meeting might not happen.
Meanwhile, oil prices rose around 2 percent on speculation that India may reduce crude purchases from Russia as part of a trade deal with the US. Washington has long argued that such imports help fund Moscow’s war in Ukraine.
India, which imports more than 85 percent of its crude needs, began buying discounted Russian oil in 2022 following Western sanctions on Moscow. New Delhi has yet to confirm or deny any change in policy.
Source: AFP
