Gold and Silver Prices Crash Sharply Ahead of Festival Season

Precious metals have witnessed a major price drop across domestic markets and the Multi Commodity Exchange, pushing silver below the two lakh rupees per kilogram mark just ahead of the festive season.

Market Rates

According to the Indian Bullion Jewellers Association, silver closed at 2,10,918 rupees on October 16 and fell to 1,94,415 rupees, marking a drop of more than 16,000 rupees per kilogram in just four days of trading. On the Multi Commodity Exchange, December silver futures dropped from 2,11,187 rupees to 1,96,100 rupees. December gold futures fell by 5,768 rupees to settle at 1,42,150 rupees per ten grams, while retail gold prices dropped by 4,796 rupees to 1,41,630 rupees. In terms of various purities, 22-karat gold stands at 1,38,230 rupees, 20-karat at 1,26,050 rupees, 18-karat at 1,14,720 rupees, and 14-karat at 91,350 rupees per ten grams.

Global Pressures

Global share market selling and crude oil prices reaching up to 117 dollars per barrel added heavy pressure on precious metals. According to Bloomberg, TD Securities senior commodity strategist Ryan McKay stated that oil prices, interest rates, and the stance of the Federal Reserve are weighing on gold. New tensions in the Middle East pushed energy costs up, while capital moving out of artificial intelligence stocks sent investors toward US bonds, boosting Treasury bond returns and weakening gold. Meanwhile, spot gold futures on Comex traded near 4,030 dollars per ounce, and silver hovered around 54 dollars per ounce. Zeta Capital Markets chief investment officer Naeem Aslam noted that rising bond yields, a stronger US dollar, and Brent crude staying above 110 dollars per barrel revived inflation concerns.

ETF Holdings

Despite falling prices in physical markets, exchange-traded funds tracked by Bloomberg have recorded continuous gold inflows for the past fourteen weeks. Saxo Bank A/S head of commodity strategy Ole Hansen wrote in a note that long-term investors continue building gold positions through ETFs to hedge against geopolitical risks and declining currency purchasing power.

Context

Precious metal prices often fluctuate due to a mix of global economic shifts, currency values, and festival demand in domestic markets. When global inflation fears rise or investors shift funds toward fixed-income assets like bonds, safe-haven metals like gold and silver frequently face sudden selling pressure.