Has gold or silver topped their cycles? Expert says historic drop may be just a pause in bigger bull run
The weakness marks the end of gold’s nine-week winning streak, with the metal dropping over 5% earlier this week, its sharpest one-day fall in five years. The slump also triggered heavy outflows from gold-backed ETFs, which saw their largest single-day decline in holdings in five months, suggesting institutional profit-taking after a record-breaking run.
- Oct 24, 2025,
- Updated Oct 24, 2025 2:54 PM IST
After nine straight weeks of gains, gold and silver prices corrected sharply this week, raising a burning question for investors: Has the rally finally topped out?
On the Multi Commodity Exchange (MCX), gold December futures fell 0.44% to Rs 1,23,552 per 10 grams on Friday morning, while silver December contracts slipped 0.98% to Rs 1,47,052 per kg around 9:06 a.m. IST. The decline came ahead of a key U.S. inflation report expected later in the day — data that could influence Federal Reserve rate decisions and the direction of global commodities.
The weakness marks the end of gold’s nine-week winning streak, with the metal dropping over 5% earlier this week, its sharpest one-day fall in five years. The slump also triggered heavy outflows from gold-backed ETFs, which saw their largest single-day decline in holdings in five months, suggesting institutional profit-taking after a record-breaking run.
Rare statistical event
According to Alok Jain, founder of Weekend Investing, gold’s recent fall was “a historic event in statistical terms.” On October 21, gold prices fell 5.7% in a single session, the steepest one-day drop since April 2013. “It was a 4.5 sigma event — something that statistically happens once in 2,40,000 trading days,” Jain explained. “Nearly $2.5 trillion in gold market capitalization was wiped out in just 48 hours.”
Silver, too, witnessed a sharp correction, plunging nearly 9% in a single day — the biggest decline since the pandemic crash of 2020. However, Jain cautioned that such pullbacks are normal after historic rallies. “Before this drop, gold and silver had posted their best rally in over four decades,” he said. “Even after this correction, silver remains up 67% and gold 55% for the year — outperforming the S&P 500 fourfold.”
Is the bull run over?
Jain noted that similar nine-week winning streaks in gold’s history — recorded only five times in the last 55 years — were typically followed by short-term declines but not the end of a bull market. “In the 1980s, gold gave up 32% in the two months after such a streak, yet went on to rally 30x over the next decade,” he said. “Corrections of 10–20% after parabolic moves are entirely normal.”
He attributed the current correction to overcrowded trades and leveraged positions. “In the week ending October 10, gold and silver funds saw $8.2 billion in inflows. When prices started falling, leveraged traders were forced to exit, amplifying the sell-off,” he said. “This is a classic shakeout in a crowded trade.”
Fundamentals remain intact
Despite short-term volatility, the fundamentals for gold remain strong, Jain emphasized. “Central banks are buying over 1,000 tonnes of gold a year. They’re not doing it by accident — they’re hedging against growing fiscal deficits, currency debasement, and weakening trust in fiat systems,” he explained.
He added that the U.S. debt level crossing $38 trillion reinforces gold’s appeal as a hedge. “As long as governments keep printing money and expanding deficits, gold will continue to act as the antidote to paper currencies.”
Silver -- the wild card
Silver, while benefiting from gold’s momentum, remains far more volatile. “Silver is not a central-bank asset, so its price swings are sharper,” Jain said. “It’s more suited for nimble traders than conservative investors. But for those who can stomach volatility, the long-term potential remains strong.”
The recent correction, experts say, should be viewed as a healthy retracement rather than a reversal. After a 33% surge in just two months, gold was due for a pullback. Historically, bull markets have seen retracements of 30–50% before resuming their uptrend.
As Jain concluded: “If you’re buying gold or silver, do it with a 10-year perspective. This is not the end of the rally — it’s merely a pause in a much larger global realignment.”
For now, the short-term chart may look shaky, but the long-term story for precious metals — driven by inflation fears, monetary easing, and de-dollarisation trends — remains firmly bullish.
After nine straight weeks of gains, gold and silver prices corrected sharply this week, raising a burning question for investors: Has the rally finally topped out?
On the Multi Commodity Exchange (MCX), gold December futures fell 0.44% to Rs 1,23,552 per 10 grams on Friday morning, while silver December contracts slipped 0.98% to Rs 1,47,052 per kg around 9:06 a.m. IST. The decline came ahead of a key U.S. inflation report expected later in the day — data that could influence Federal Reserve rate decisions and the direction of global commodities.
The weakness marks the end of gold’s nine-week winning streak, with the metal dropping over 5% earlier this week, its sharpest one-day fall in five years. The slump also triggered heavy outflows from gold-backed ETFs, which saw their largest single-day decline in holdings in five months, suggesting institutional profit-taking after a record-breaking run.
Rare statistical event
According to Alok Jain, founder of Weekend Investing, gold’s recent fall was “a historic event in statistical terms.” On October 21, gold prices fell 5.7% in a single session, the steepest one-day drop since April 2013. “It was a 4.5 sigma event — something that statistically happens once in 2,40,000 trading days,” Jain explained. “Nearly $2.5 trillion in gold market capitalization was wiped out in just 48 hours.”
Silver, too, witnessed a sharp correction, plunging nearly 9% in a single day — the biggest decline since the pandemic crash of 2020. However, Jain cautioned that such pullbacks are normal after historic rallies. “Before this drop, gold and silver had posted their best rally in over four decades,” he said. “Even after this correction, silver remains up 67% and gold 55% for the year — outperforming the S&P 500 fourfold.”
Is the bull run over?
Jain noted that similar nine-week winning streaks in gold’s history — recorded only five times in the last 55 years — were typically followed by short-term declines but not the end of a bull market. “In the 1980s, gold gave up 32% in the two months after such a streak, yet went on to rally 30x over the next decade,” he said. “Corrections of 10–20% after parabolic moves are entirely normal.”
He attributed the current correction to overcrowded trades and leveraged positions. “In the week ending October 10, gold and silver funds saw $8.2 billion in inflows. When prices started falling, leveraged traders were forced to exit, amplifying the sell-off,” he said. “This is a classic shakeout in a crowded trade.”
Fundamentals remain intact
Despite short-term volatility, the fundamentals for gold remain strong, Jain emphasized. “Central banks are buying over 1,000 tonnes of gold a year. They’re not doing it by accident — they’re hedging against growing fiscal deficits, currency debasement, and weakening trust in fiat systems,” he explained.
He added that the U.S. debt level crossing $38 trillion reinforces gold’s appeal as a hedge. “As long as governments keep printing money and expanding deficits, gold will continue to act as the antidote to paper currencies.”
Silver -- the wild card
Silver, while benefiting from gold’s momentum, remains far more volatile. “Silver is not a central-bank asset, so its price swings are sharper,” Jain said. “It’s more suited for nimble traders than conservative investors. But for those who can stomach volatility, the long-term potential remains strong.”
The recent correction, experts say, should be viewed as a healthy retracement rather than a reversal. After a 33% surge in just two months, gold was due for a pullback. Historically, bull markets have seen retracements of 30–50% before resuming their uptrend.
As Jain concluded: “If you’re buying gold or silver, do it with a 10-year perspective. This is not the end of the rally — it’s merely a pause in a much larger global realignment.”
For now, the short-term chart may look shaky, but the long-term story for precious metals — driven by inflation fears, monetary easing, and de-dollarisation trends — remains firmly bullish.