After repeatedly hitting new highs, precious metal prices fell sharply on October 22 

According to the commodity market analysis system of SunSirs, as of October 22, 2025, the spot market price of gold was 945.46 RMB/gram, up 8.41% from the gold spot market price of 872.11 RMB/gram at the beginning of this month (October 1), and down 4.13% from the gold spot market price of 986.21 RMB/gram on October 21. The price of gold rose and then fell during the month, repeatedly setting new highs in the early stage, and fell from the high on October 22. The overall price was still at an absolute historical high.

According to the commodity market analysis system of SunSirs, the average market price of silver on October 22, 2025 was 11,299.67 RMB/kg, up 3.76% from the average market price of silver of 10,890.33 RMB/kg at the beginning of this month (October 1), and down 4.39% from the average market price of silver of 11,891 RMB/kg on October 21. 

Precious metals and crude oil price trends 

Since 2025, the price correlation between precious metals and Brent crude oil has shifted from a weak positive correlation in the short term to a significant negative correlation in the long term.

A comparison of precious metal price trends for gold and silver over the past year

Gold and silver prices over the one-year period from October 22, 2024, to October 22, 2025:

1. Overall trend: Synchronously rose, gold performed stronger

Both gold and silve showed significant upward trends, with gold prices fluctuating by over 56.53% and silver by over 40.34%. The precious metals sector was generally strong. Gold's price increase significantly outpaced silver's, reflecting its advantages as a safe haven and a store of value. Market-driven factors (such as the macroeconomic environment and geopolitics) had led to a greater preference for gold allocations, resulting in its leading gains.

2. Stage trend: Fluctuating upward, with accelerated rise in the later period

During the initial period (October 2024-April 2025), both gold and silver experienced a volatile upward trend. Gold's gains exceeded 30% first, while silver's gains lagged behind, rising slowly amidst fluctuations. The main drivers of precious metals' upward movement during this period were safe-haven demand driven by global economic uncertainty and shifting monetary policy expectations.

In the medium term (April 2025-August 2025), gold entered a period of high volatility, maintaining gains in the 25%-30% range. Silver began to catch up, rapidly increasing from single-digit gains to nearly 20%. During this phase, the market shifted its allocation logic for precious metals from a purely risk-averse approach to a dual-pronged approach of "risk-averse plus industrial demand (silver)." Silver's industrial attributes (such as applications in new energy and electronics) began to take off, driving further gains.

In the latter half of the period (August 2025-October 2025), both gold and silver entered an accelerated upward trend, with gold's gains exceeding 56% and silver's exceeding 40% in the final period. This phase was likely driven by factors such as escalating geopolitical risks and a shift toward looser monetary policies in major global economies (e.g., expectations of interest rate cuts). The appeal of precious metals as inflation-fighting and safe-haven assets was further amplified, and a massive influx of capital was driving prices rapidly upward.

3. Market driving logic

Macroeconomics: Uncertainty in global economic growth, changes in inflation levels, and the monetary policy trends of major central banks (such as the Federal Reserve) (such as the start of a cycle of interest rate cuts) were the core macroeconomic factors driving up precious metal prices.

Safe-haven demand: The risk-averse sentiment caused by events such as regional conflicts and financial market fluctuations had a particularly significant driving effect on gold, making it a "safe haven" for funds.

Industrial demand: The industrial application demand for silver in new energy, electronics and other fields provided additional support for its growth in the later stage of the market, narrowing the gap with the growth of gold.

In summary, the precious metals market in the past year was characterized by "gold leading the rise, silver following the rise, and both accelerating in the later period", showing an overall strong bull market, and the driving factors of the market evolved from a single logic in the early stage to a multiple logic in the later stage.

Reasons for the callback on the 22nd

On October 22, 2025, precious metals gold and silver experienced a sharp drop, mainly driven by the following multiple factors:

1. Profit-taking and technical pullbacks

Gold and silver prices had been rising continuously, reaching record highs, accumulating significant profit-taking in the market. When prices rose too rapidly, investors, driven by the desire to lock in profits, engaged in concentrated profit-taking, triggering a technical correction. For example, spot gold prices plummeted by over 6.3% that day, marking their largest single-day drop since April 2013; spot silver prices plummeted by over 8.7%, marking their largest drop since 2021. These extreme fluctuations were a direct reflection of the concentrated exit of profit-taking.

2. Geopolitical risks eased

The geopolitical risk-averse logic that had previously driven precious metals prices higher had begun to weaken. On the one hand, news of a ceasefire agreement in the Israeli-Palestinian conflict had weakened market risk aversion. On the other hand, former US President Trump's softening stance on trade had also reduced concerns about global trade frictions, significantly reducing gold's safe-haven appeal.

3. Forced selling caused by market liquidity crisis

Tight liquidity in the financial system was forcing investors to sell highly liquid assets. A former economic advisor to the Federal Reserve Bank of Dallas noted that the plummeting gold price was a distress signal of a systemic liquidity crisis. Some investors, facing margin calls or the need to raise cash quickly, were forced to liquidate highly liquid assets like gold, further exacerbating the price decline.

4. Indirect Impact of Fluctuations in the US Dollar Index

Despite a slight decline in the US dollar index that day, the shift in expectations for Fed policy was already fully reflected in prices. Market expectations for Fed rate cuts (such as a 25 basis point cut in October) were already overpriced. Once the policy was implemented, funds shifted from the precious metals market to other assets, resulting in insufficient buying for gold and silver.

5. Holdings Structure and Market Sentiment Changes

Looking at holdings data, gold and silver ETFs continued to increase their holdings, accumulating a large number of speculative long positions. When market sentiment shifted from optimism to caution, these crowded long positions were liquidated en masse, creating a "buy-kill-buy" situation that amplified the price drop.

In summary, the recent decline in precious metals was the result of a combination of profit-taking, geopolitical easing, liquidity pressure, and deteriorating position structure, and was a phased adjustment after the previous rise.

Market Forecast

Precious metals prices are expected to fluctuate in the short term, diverge in the medium term, and improve in the long term. Focus will be on Federal Reserve policy trends, geopolitical dynamics, and industrial demand data.

If you have any inquiries or purchasing needs, please feel free to contact SunSirs with support@sunsirs.com.