Gold and silver prices have settled following a day of extreme selling pressure which saw both metals suffer their worst one-day performances in years.

After an unrelenting rally that kicked off near the end of August, gold had strayed well into overbought territory, setting a new spot price record of $4,381.98 per ounce on Monday. Technical selling kicked in, as big players looked to take profit from the latest leg of the bull run, plunging gold down to $4,067.70 at its worst.

221025 USD Chart

The 7% fall was dramatic, and almost certainly resulted in some panic selling as people saw the price falling so quickly. Gold has settled down for now however, and recovered to $4,140.70 at the time of writing. $4,100 will remain a support point for now, and $4,000 a likely key psychological threshold. If gold slipped below that level, some further selling pressure could come.

Silver suffered even more than gold however following its recent rally that saw it set a new all-time high of $55.51. The technical selling pressure seen in gold was worsened by reports of a delivery of nearly 1,000 tons of silver from the US and China to London. Most of silver’s gains in the past two weeks were driven by a supply shortage in the London market, and with that pressure alleviated, silver started to sell quickly.

Silver dropped as low as $48.06 yesterday, a drop of almost 10%. Like gold however, it has recovered somewhat in trading today, reaching $49.24 at the time of writing. $50 was always a dangerous level for silver, one in which it had sold off in 1980 and 2011. Consolidating for a period around $50 would be very healthy for silver, which could face more selling pressure.

While the correction for both metals was certainly dramatic, taken in the longer-term context they do not spell disaster. Gold remains up 11% in the past month alone, and 58% so far in 2025. Silver is also 69% up so far this year, a very strong performance for both.

Markets remain confident that the Fed will ease US rates further next week, with a 25 basis point cut currently given a 98.9% chance on the CME FedWatch tool. Central banks remain buyers of gold, the US government remains in shutdown, and global debt continues to rise.

Fresh momentum may be needed to get gold and silver rising again, but long-term they both remain well supported, even after yesterday's rout.