Gold and Silver came under renewed pressure at the start of the week. Gold briefly dropped below 4,000 mark before stabilizing, while Silver’s decline gathered pace after breaking key retracement support.
The timing of the selloff coincides with the announcement of a new U.S.–China framework deal designed to avert a major tariff escalation in November. The prospect of easing trade tensions has reduced demand for defensive assets, encouraging investors to rotate into equities and risk currencies. Optimism over the pending Trump–Xi summit has also supported broader market confidence.
Markets now await two pivotal events: Fed’s policy meeting tomorrow and the Trump–Xi summit on Thursday. These will likely set the near-term tone for the broader markets, including precious metals. Price behavior around these events will reveal whether the current pullback gathers further momentum.
So far, technical and macro signals both point to a more extended corrective phase than initially anticipated. Rather than a quick pause before resuming the uptrend, Gold and Silver may need to spend the rest of the year to form a base, laying the groundwork for a new leg higher in 2026.
In Gold’s case, the decline still fits within a corrective structure to the rally from 3,267.90. The metal remains above 3,944.57 cluster support (38.2% retracement of 3267.90 to 4381.22 at 3955.93). A rebound from current level and break of 4,161.35 resistance would suggest the pullback from 4,381.22 is complete, targeting a retest of the record high. However, strong resistance is likely to cap gains near the previous peak, keeping Gold confined to a range between roughly 3,944 and 4,381.
However, decisive break below 3,944.57 would bring deeper correction to 55 D EMA (now at 3,818.40) where stronger demand should emerge to form a base.
Silver’s decline has been more pronounced. The metal has already violated 38.2% retracement of 36.93 to 54.44 at 47.75. Still, it remains a correction of the rise from 36.93, rather than a larger one. A drop toward 55 D EMA (now at 45.16) is likely, but solid support is expected there. A rebound through 49.42 would mark the end of this corrective leg and bring stronger rise to retest 54.44.
However, sustained weakness below 55 Day EMA would imply Silver has entered a larger corrective phase to the rise from 28.28.
