Gold and Silver Prices Drop on Monday Amid Market Volatility

Gold and silver prices declined on Monday morning as markets experienced continued volatility driven by both technical trading patterns and fundamental economic factors, according to industry experts.

Global spot gold prices fell 0.83 percent to $4,079.38 per ounce by 10am UAE time, while silver dropped 0.53 percent to $48.34, extending its recent downward trend.

In Dubai, 24-karat gold was trading at Dh491.50 per gram on Monday morning. The prices for 22K, 21K, and 18K gold also declined to Dh455, Dh436.25, and Dh374 per gram respectively.

Indian Gold Prices Fall Too

In India, gold prices also witnessed a decline on Monday. In major cities across Karnataka and other states, 24-karat gold was trading around ₹123130 per 10 grams, Silver prices in India dropped to around ₹1,550 per 10 grams.

Why Are Prices Falling?

Dilin Wu, Research Strategist at Pepperstone, explained that the decline is partly due to technical factors. “Bulls had pushed gold higher for nine consecutive weeks before last week, with market indicators showing overbought conditions since early September,” Wu said. “This signals that a price correction was needed.”

Gold had reached a record high of Dh525.25 on October 21, supported by multiple favorable factors. However, since then, the precious metal experienced its sharpest single-day drop in over a decade, falling more than six percent. Indian buyers who purchased gold during Diwali celebrations at peak prices have seen the value of their investments decrease.

US-China Trade Tensions Ease

Nishin Thaslim, Chairman of Nishka Jewelry, pointed to international developments as a key factor. “The trade war between China and the US is almost nearing an end,” he said. “This has increased global optimism and led to a dip in gold prices.”

Wu added that markets are expecting China to relax its rare earth export restrictions and that the Trump administration might extend the 90-day tariff pause, reducing geopolitical uncertainties.

“As a result, investors who were holding gold as a safe investment have shifted their money back into riskier assets,” she explained. “Additionally, the CME’s 5.2 percent increase in margin requirements for gold and silver has reduced short-term buying interest.”

What’s Next for Gold?

Wu predicted that gold is likely to trade in a “neutral to slightly bearish range this week,” depending on market sentiment and economic announcements.

“With an October rate cut already expected by most traders, the market is watching Federal Reserve Chairman Powell’s statements closely,” she said. “If he acknowledges cooling inflation and signals more rate cuts in December, it could support gold prices.”

However, she cautioned that concerns about tariff impacts or policy uncertainty could push prices lower. The upcoming meeting between US and Chinese leaders at the APEC summit could also influence prices significantly.

“If both countries announce concessions without further escalation, it will reduce demand for safe-haven assets like gold, putting more downward pressure on prices in the short term,” Wu added.

For Indian buyers, especially those in Karnataka and other states, the current dip presents a potential buying opportunity, though experts suggest monitoring the market closely before making large purchases.