Gold Slips Below $4,000, Silver Crashes 7.8% in a Week: Why Precious Metals Fell as Crude Surged

Gold lost its $4,000 perch this week, and silver fell even harder. In a week dominated by surging crude oil and a selloff in technology stocks, precious metals went from safe haven to selling list — and the damage was the worst in months.

Gold prices dipped 3.28 per cent on a weekly basis, while silver declined 7.83 per cent, as rising crude oil prices heightened inflation fears. Gold recorded its steepest weekly decline since June and slipped below the psychologically important $4,000 per ounce level for the first time since mid-July. Spot gold closed the week around $3,995 an ounce.

The numbers that tell the story

On Friday, MCX gold futures expiring in December declined 0.81 per cent to Rs 1,42,150, while MCX silver futures for December shed 1.75 per cent to Rs 1,96,100 per kg. The weekly losses came even as geopolitical tensions stayed high — a reminder that gold does not rise on every crisis.

Crude oil was the other side of the trade. Brent crude climbed to $116.72 a barrel, its highest level since April, while US West Texas Intermediate rose to $103.27, after renewed attacks on Saudi energy infrastructure and shipping routes pushed supply fears back into the market.

Three forces pushed metals down

First, inflation fears. Expensive crude raises energy and transport costs, which feeds inflation expectations and reinforces the view that global interest rates will stay higher for longer. Higher rates raise the opportunity cost of holding gold, which pays no interest.

Second, forced selling. The selloff in silver intensified over weakness in US technology stocks, particularly AI-linked companies, which triggered margin calls and forced investors to liquidate precious-metal holdings to raise cash. When leveraged positions unwind, even unrelated assets get sold.

Third, a firmer dollar. The Indian rupee surrendered its early-week gains amid rising oil prices and renewed dollar demand, and a stronger dollar typically makes dollar-priced metals more expensive for buyers in other currencies.

The India angle: festival demand cushioned the fall

Lower prices encouraged physical gold purchases in India during the Dussehra festival, providing some underlying demand support, even as Chinese jewellery demand remained subdued. For Indian households, the correction brought prices back from record territory — MCX gold had been trading far above current levels during the recent rally.

What to watch next week

Markets largely expect the US Federal Reserve to keep interest rates unchanged at its October 27–28 policy meeting, but expectations of another rate hike in December remain elevated, with traders pricing approximately a 78 per cent probability. Investors are also awaiting the US Personal Consumption Expenditures report next week for additional guidance on inflation and future interest-rate decisions.

On the charts, analysts place immediate resistance for Comex Gold at the $4,070–$4,100 zone, with support at $3,970–$4,000. For MCX Gold, resistance sits at Rs 1,43,000–Rs 1,43,700, with support at Rs 1,40,000–Rs 1,41,000. Market participants say precious metals could remain under pressure if elevated energy prices reinforce inflation concerns, though physical demand and any moderation in bond yields could offer support after the correction.

This article is for information only and is not investment advice. Prices move quickly on geopolitical and central-bank news, and readers should check live rates before making any buying decision.