Gold and silver face strong price pressure as risk appetite strengthens
2025-10-28 00:41:48
Gold and silver prices fell sharply in early U.S. trading on Monday (October 27). Weekend news that China and the United States were close to reaching a major trade deal boosted risk appetite, sending global stock markets higher and setting U.S. stock indices on track to open at record highs. Both gold and silver metals also saw technical selling as bearish flag patterns formed on their daily charts in December.
Reports indicate that borrowing costs for silver in London have retreated from record highs, suggesting greater liquidity has returned to the silver market. Data shows that silver lease rates fell to 5.6% on Monday after surging to a record high of 34.9% on October 9. The London Bullion Market Association is considering publishing weekly silver inventory levels, and its CEO, Ruth Crowell, has stated that silver will receive higher priority than gold.
Global stock markets rallied overnight on expectations of a US-China trade deal. US stock indexes surged, with New York markets poised to hit record highs upon opening. Safe-haven assets like gold and silver fell sharply overnight as overall risk appetite increased.
U.S. trade agreements with other Asian countries are also progressing. President Trump also indicated over the weekend that other trade deals with several Southeast Asian nations are nearing completion, aimed at increasing U.S. access to critical minerals and agricultural products. These agreements include tariff exemptions for key exports from countries like Thailand, Cambodia, Vietnam, and Malaysia, as well as framework trade agreements to be announced in the coming weeks.
The Federal Reserve is expected to cut U.S. interest rates this week. The central bank is expected to cut rates by a quarter percentage point for the second time Wednesday afternoon to support a shaky job market, but may face opposition from some officials concerned about inflation. Friday's data showed that U.S. consumer prices rose by the smallest amount in three months in September, bolstering the Federal Open Market Committee's plan to cut rates this week. However, Fed policymakers are divided, with some concerned about overly aggressive rate cuts and others favoring further reductions, all amidst the federal government shutdown, which has prevented the release of government economic data. Meanwhile, Treasury Secretary Jeffrey Bessant confirmed the five finalists to succeed Federal Reserve Chairman Jerome Powell. The finalists include current Federal Reserve board members Christopher Waller and Michelle Bowman, former Fed Governor Kevin Warsh, White House National Economic Council Director Kevin Hassett, and BlackRock executive Rick Reed. President Trump has stated that he expects to make a decision on the nominees by the end of the year.
A key sign that the US government shutdown may be ending soon is that the impasse between Republican and Democratic lawmakers is taking a toll on US air travelers as the shutdown enters its fourth week, with flight delays starting to appear. US Transportation Secretary Sean Duffy warned over the weekend that US travelers will face more flight delays and cancellations in the coming weeks as the shutdown continues to exacerbate air traffic controller shortages. "As we move into Monday, Tuesday, and Wednesday, I expect to see more staffing shortages in the towers, which means more delays and cancellations," Duffy told Fox News on Sunday.
Air traffic controllers were notified last week that they would not be paid due to the government shutdown, which began on October 1st. Duffy said more air traffic workers are calling in sick and some are seeking second jobs and other sources of income to make ends meet. There's one thing both Democrats and Republicans can agree on, and one that neither side can avoid: facing the accusations, anger, and potential Election Day fallout from tens of thousands of angry American voters stranded at airports and on the tarmac. This situation could prompt US lawmakers to reach a compromise and reopen the government.
Key external market conditions today showed a weakening U.S. dollar index. Crude oil prices fell slightly, trading around $61.28 per barrel. The benchmark 10-year U.S. Treasury yield is currently at 4.028%.
(Comex Gold Daily Chart Source: Yihuitong)
From a technical perspective, December gold futures bulls still have the overall short-term technical advantage, but have weakened significantly. A small bearish flag pattern has formed on the daily chart. Bulls' next upside price objective is closing prices above solid resistance at $4,200.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $3,900.00. First resistance is seen at $4,100.00 and then at the overnight high of $4,123.80. Support is seen at $4,000.00.
Silver market bulls still have the overall short-term technical advantage, but have weakened significantly. A small bearish flag pattern has formed on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $50.00. The next downside price objective for the bears is closing prices below solid support at $45.00. First resistance is seen at the overnight high of $48.595 and then at $49.00. Support is at $46.00.
The gold market operates through two primary pricing mechanisms. The first is the spot market, which quotes prices for physical purchases and immediate delivery. The second is the futures market, which sets prices for delivery at a future date. Due to the liquidity of the year-end open interest market, the December gold futures contract is currently the most actively traded contract on the Chicago Mercantile Exchange (CME).
Reports indicate that borrowing costs for silver in London have retreated from record highs, suggesting greater liquidity has returned to the silver market. Data shows that silver lease rates fell to 5.6% on Monday after surging to a record high of 34.9% on October 9. The London Bullion Market Association is considering publishing weekly silver inventory levels, and its CEO, Ruth Crowell, has stated that silver will receive higher priority than gold.
Global stock markets rallied overnight on expectations of a US-China trade deal. US stock indexes surged, with New York markets poised to hit record highs upon opening. Safe-haven assets like gold and silver fell sharply overnight as overall risk appetite increased.
U.S. trade agreements with other Asian countries are also progressing. President Trump also indicated over the weekend that other trade deals with several Southeast Asian nations are nearing completion, aimed at increasing U.S. access to critical minerals and agricultural products. These agreements include tariff exemptions for key exports from countries like Thailand, Cambodia, Vietnam, and Malaysia, as well as framework trade agreements to be announced in the coming weeks.
The Federal Reserve is expected to cut U.S. interest rates this week. The central bank is expected to cut rates by a quarter percentage point for the second time Wednesday afternoon to support a shaky job market, but may face opposition from some officials concerned about inflation. Friday's data showed that U.S. consumer prices rose by the smallest amount in three months in September, bolstering the Federal Open Market Committee's plan to cut rates this week. However, Fed policymakers are divided, with some concerned about overly aggressive rate cuts and others favoring further reductions, all amidst the federal government shutdown, which has prevented the release of government economic data. Meanwhile, Treasury Secretary Jeffrey Bessant confirmed the five finalists to succeed Federal Reserve Chairman Jerome Powell. The finalists include current Federal Reserve board members Christopher Waller and Michelle Bowman, former Fed Governor Kevin Warsh, White House National Economic Council Director Kevin Hassett, and BlackRock executive Rick Reed. President Trump has stated that he expects to make a decision on the nominees by the end of the year.
A key sign that the US government shutdown may be ending soon is that the impasse between Republican and Democratic lawmakers is taking a toll on US air travelers as the shutdown enters its fourth week, with flight delays starting to appear. US Transportation Secretary Sean Duffy warned over the weekend that US travelers will face more flight delays and cancellations in the coming weeks as the shutdown continues to exacerbate air traffic controller shortages. "As we move into Monday, Tuesday, and Wednesday, I expect to see more staffing shortages in the towers, which means more delays and cancellations," Duffy told Fox News on Sunday.
Air traffic controllers were notified last week that they would not be paid due to the government shutdown, which began on October 1st. Duffy said more air traffic workers are calling in sick and some are seeking second jobs and other sources of income to make ends meet. There's one thing both Democrats and Republicans can agree on, and one that neither side can avoid: facing the accusations, anger, and potential Election Day fallout from tens of thousands of angry American voters stranded at airports and on the tarmac. This situation could prompt US lawmakers to reach a compromise and reopen the government.
Key external market conditions today showed a weakening U.S. dollar index. Crude oil prices fell slightly, trading around $61.28 per barrel. The benchmark 10-year U.S. Treasury yield is currently at 4.028%.
(Comex Gold Daily Chart Source: Yihuitong)
From a technical perspective, December gold futures bulls still have the overall short-term technical advantage, but have weakened significantly. A small bearish flag pattern has formed on the daily chart. Bulls' next upside price objective is closing prices above solid resistance at $4,200.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $3,900.00. First resistance is seen at $4,100.00 and then at the overnight high of $4,123.80. Support is seen at $4,000.00.
Silver market bulls still have the overall short-term technical advantage, but have weakened significantly. A small bearish flag pattern has formed on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $50.00. The next downside price objective for the bears is closing prices below solid support at $45.00. First resistance is seen at the overnight high of $48.595 and then at $49.00. Support is at $46.00.
The gold market operates through two primary pricing mechanisms. The first is the spot market, which quotes prices for physical purchases and immediate delivery. The second is the futures market, which sets prices for delivery at a future date. Due to the liquidity of the year-end open interest market, the December gold futures contract is currently the most actively traded contract on the Chicago Mercantile Exchange (CME).
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
