Gold and silver prices drop ahead of Diwali festivities

Precious metal prices are falling during the current festival season, with 24-karat gold dropping by roughly 14,000 rupees during September and October 2026. Data from the India Bullion and Jewellers Association, IBJA, shows that ten grams of gold cost around 1.55 lakh rupees on August 31. Silver prices dropped by nearly 43,000 rupees over the last two months and by a total of 1.92 lakh rupees over nine months. Silver reached an all-time high of 3.86 lakh rupees per kilogram on January 29, 2026, before falling to 1.94 lakh rupees by October 23, 2026. International market rates show gold at roughly 4,000 dollars per ounce, where one ounce equals 31.1 grams, and silver at about 54 dollars per ounce. At the start of the year on January 1, 2026, gold was about 4,321 dollars and silver was 71.74 dollars per ounce, marking a 7.5 percent drop for gold and 25 percent for silver globally over ten months. Factors driving these drops include investors expecting higher profits from bank interest compared to gold, reduced gold purchases due to a stronger US dollar, and people selling their expensive gold holdings to book profits. Even so, global gold ETFs grew by 10 billion dollars in September 2026 according to World Gold Council figures, and central banks continue buying gold. Saxo Bank commodity strategy head Ole Hansen states that short-term traders are cutting their bets while demand from long-term investors remains strong. Market uncertainty continues as traders await the US Federal Reserve meeting on October 27 and 28. Ajay Kedia, director of commodity and equity research firm Kedia Advisory, notes that domestic gold could drop to 1.38 lakh rupees per ten grams in the coming days, while silver could reach 1.95 lakh rupees, though silver might climb back to 3 to 3.25 lakh rupees per kilogram by next Diwali.

Context

Precious metals like gold and silver often see sharp price swings driven by global currency values, international conflicts, and central bank interest rate decisions. Retail buyers typically monitor these commodity markets closely during the festival season when purchasing gold and silver jewelry is a widespread cultural tradition across India.