Precious metal prices hit new highs in October before pulling back 

According to the SunSirs' commodity market analysis system, as of October 31, 2025, the spot gold market price was 918.62 RMB/gram, an increase of 5.33% compared to the beginning of the month (October 1) when the spot gold market price was 872.11 RMB/gram, and a decrease of 6.85% compared to the spot gold market price of 986.21 RMB/gram on October 21. Gold prices rose and then fell throughout the month, repeatedly hitting new highs in the early stages with a monthly increase of up to 13.08%, before starting to decline from the highs in the latter half of the month. As of October 31, the overall price level remained at a historically high level.

According to the SunSirs' commodity market analysis system, the average price of silver on October 31, 2025 was 11,476 RMB/kg, an increase of 5.38% compared to the average price of 10,890.33 RMB/kg at the beginning of the month (October 1), and a decrease of 5.89% compared to the average price of 12,194 RMB/kg on October 17. Silver prices rose and fell throughout the month, repeatedly hitting new highs, with a monthly increase of 11.98%. Prices began to decline from their highs in the latter half of the month, but were still at historically high levels.

Overview of precious metal and crude oil price trends

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

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

Looking at the past year, gold and silver maintained a strong positive correlation. The price changes of gold and silver generally fluctuated in the same direction, and their upward and downward trends were largely synchronized for most of the time. For example, during the upward phase from late October 2024 to April 2025, and during subsequent fluctuations and further upward movements, the trend lines of both silvers were essentially aligned.

Reasons for record high precious metal prices in October

The record high in precious metal prices in October 2025 was mainly driven by a combination of factors, including expectations of a Federal Reserve interest rate cut, heightened risks to the US economy, increased gold holdings by global central banks, a large influx of funds, and upward revisions of price forecasts by institutions. Details were as follows:

Expectations of a Fed rate cut strengthened: the market widely anticipates a 25 basis point rate cut by the Fed in October, and Powell's statements regarding downside risks to the US employment and inflation outlook had further solidified expectations of easing. The low-interest-rate environment reduced the opportunity cost of holding precious metals, becoming a direct driver of the short-term price surge.

The US economic risks were escalating: the US government shutdown crisis had disrupted the release of economic data and could cause the US economy to lose up to $15 billion in output per week. At the same time, a weak job market and trade frictions triggered by tariff policies had exacerbated market concerns about an economic recession, prompting investors to flock to safe-haven assets such as gold.

Global central banks continued to increase their gold holdings: In the first half of 2025, global central banks made net purchases of 123 tons of gold, with an increase of 22 tons in June alone. The People's Bank of China had increased its holdings for nine consecutive months, and 73% of the surveyed central banks plan to increase their holdings in 2026. Global central banks had increased their gold holdings for five consecutive years, using this to diversify foreign exchange reserve risks and provide long-term support for gold prices.

Large-scale capital inflows into the precious metals market: The People's Bank of China increased its gold holdings for 11 consecutive months, signaling an optimization of its foreign exchange reserves. Global gold ETFs saw record-high net inflows in a single month, while silver ETF holdings surged by 95% year-on-year. Retail investors were also accelerating their entry into the market through futures and gold accumulation channels, with the influx of funds driving up precious metal prices.

Institutions raised their price forecasts: Bank of America had raised its 2026 gold price target to $6,000, while Societe Generale, Goldman Sachs, and other institutions had also raised their target prices to the $4,900-$5,000 range. These optimistic expectations had further strengthened market sentiment, prompting investors to buy precious metals and driving prices to new highs.

Silver supply shortage: Silver consumption continued to grow in fields such as new energy, photovoltaics, and new energy vehicles, while the global silver supply had been in short supply for five consecutive years, with inventories declining continuously. The London silver market had seen a rare "spot premium" phenomenon, and silver was in short supply in the market, which had also driven up silver prices significantly.

Precious metal prices are likely to fluctuate at high levels in November

The recent pullback in precious metal prices is a result of a confluence of factors, including profit-taking, easing geopolitical tensions, liquidity pressures, and a deteriorating portfolio structure. This represents a temporary correction after the previous upward trend. Looking ahead, the precious metals market is expected to experience short-term volatility, medium-term divergence, and a long-term positive outlook. In the long term, factors such as continued global central bank gold purchases to diversify reserves and the ongoing challenges to the US dollar's credit system continue to provide long-term support for gold prices. The overall trend in precious metals remains unchanged, but without strong bullish support in the short term, upward momentum is relatively weak. It is expected that precious metal prices will likely fluctuate at high levels in November.

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