Gold and silver lost roughly $1.05 trillion in combined market value on Monday. Gold fell 2.9%, while silver dropped nearly 5%.
Now, gold slid below $4,200 to its lowest level since early August. The sell-off was still extending at press time.
MetalMarket cap before the dropDropValue lostGold~$30.04 trillion2.9%~$871 billionSilver~$3.65 trillion4.97%~$180 billionTotal ~$1.05 trillion
Why Gold and Silver Are Falling
Fed hike bets. CME FedWatch shows a roughly 70% chance of an October rate hike. Gold and silver pay no interest, so higher rates reduce their appeal.
Rising bond yields. The 10-year Treasury yield hit 5.20%, raising the cost of holding metals.
A stronger dollar. The US Dollar Index (DXY) hit 101.39, a two-month high. That makes metals pricier for foreign buyers.
Oil and Iran. Stalled US-Iran talks lifted Brent crude to about $107. Higher oil fuels inflation fears and hike bets.
Several Fed officials, including Cleveland Fed President Beth Hammack, signaled last week that policy should stay restrictive. The central bank has already hiked rates this year.
Gold Price Eyes Head-and-Shoulders Target Near $3,943
Gold trades near $4,160 after a 2.91% daily drop. The move confirms a head-and-shoulders pattern that formed between mid-August and early September.
The price broke the neckline near $4,320 in mid-September. However, it did not accelerate immediately. Gold spent two weeks retesting the $4,300 to $4,400 zone before sellers took control.
The pattern’s measured target aligns with the 0.5 Fibonacci retracement at $3,943. That level sits inside the $3,900 to $4,000 support zone, about 5.2% below the current price. Reaching it could erase roughly $1.5 trillion more.
The Relative Strength Index (RSI) reads 37 and is falling, leaving room before oversold territory. A daily close above $4,400 would weaken the bearish outlook.
Silver Price Loses Key $62.87 Support
Silver fell 4.97% to about $61.11. The steeper drop fits silver’s tendency to swing harder than gold.
Sellers rejected silver in the $66 to $69 zone three times since late August. That zone includes the 0.618 Fibonacci level at $68.88. Each rejection printed a lower high, suggesting fading buyer strength.
Monday’s candle broke below $62.87, a level that held in June, August, and mid-September. A daily close under it could turn this support into resistance.
The next bearish target is the 0.786 Fibonacci level at $54.51, about 11% lower. Meanwhile, the RSI sits near 40 and trends lower, mirroring gold.
A recovery above $62.87, followed by a break of the $66 to $69 zone, would invalidate this outlook.
What to Watch This Week
US labor data comes next. ADP payrolls arrive Wednesday, followed by ISM Manufacturing and jobless claims on Thursday.
Friday’s nonfarm payrolls report is the key event. A strong print could lift hike odds and extend pressure on both metals. A weak one may allow a rebound.
