Gold and silver prices plunge to 12-year lows amid Diwali festivities

Gold and silver prices in India have experienced a dramatic decline this week, plunging to levels not seen in more than a decade, despite the festive season.

According to reports, on October 17, 22-carat gold was trading at Rs 1,21,700 per 10 grams. On Thursday, the price ‌dropped to Rs 1,14,650, marking a loss of Rs 7,050 in just seven days. Further, yesterday, gold lost Rs 4,300 within the span of 24 hours, marking one of the sharpest one-day falls in 12 years.

Silver prices have mirrored this steep decline. On October 17, silver stood at Rs 2,03,000 per kilogram. As of today, it has tumbled to Rs 1,75,000, with a single-day drop of Rs 7,000 yesterday.

The resulting volatility has shaken both retail consumers and traders, disrupting buying patterns amid the traditional Diwali rush for precious metals.

Record Drops Signal Market Stress

Reports say the unprecedented fall in domestic prices is partly a reflection of global trends but is being felt most acutely in Indian markets.

Several international factors are compounding domestic price volatility. A stronger US dollar has made gold more expensive for non-dollar holders, reducing demand across global markets. The dollar index has risen 0.2% against major currencies, pressuring gold prices, which are denominated in US dollars worldwide.

Markets are also awaiting the release of the US Consumer Price Index (CPI) for September on October 24, delayed by the recent US government shutdown. Traders expect the report to show core inflation at 3.1%, which could influence the Federal Reserve’s next policy move.

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A rate cut would typically boost gold prices, but the uncertainty is contributing to short-term instability in Indian markets.

Easing Geopolitical Tensions Reduces Demand

Gold’s rally earlier this year was fueled by geopolitical tensions, bets on US interest rate cuts, and central bank purchases.

Recent signals of potential easing in global conflicts have softened the demand for bullion as a safe-haven investment. US President Donald Trump has hinted at progress in US-China trade talks and is expected to meet Chinese President Xi Jinping next week.