Gold, silver take a breather after record rally in festive season; analysts see healthy drop before next leg up
According to analysts, this pullback was both expected and healthy after an extraordinary surge that took gold from nearly Rs 75,000 to Rs 1.30 lakh in just a few months. A 10–15% correction was anticipated, which could bring prices closer to Rs 1.15 lakh per 10 grams before stabilising again.
- Oct 28, 2025,
- Updated Oct 28, 2025 1:20 PM IST
After a record-breaking rally that propelled gold to new highs earlier this month, the yellow metal is cooling off. December gold futures are trading near Rs 1.21 lakh per 10 grams, while silver has slipped to Rs 1.43 lakh per kilogram on the Multi Commodity Exchange (MCX), marking one of the sharpest weekly declines in months.
According to analysts, this pullback was both expected and healthy after an extraordinary surge that took gold from nearly Rs 75,000 to Rs 1.30 lakh in just a few months. A 10–15% correction was anticipated, which could bring prices closer to Rs 1.15 lakh per 10 grams before stabilising again.
Trade optimism cools
The key factor weighing on gold and silver is renewed optimism over a potential US–China trade deal. Reports suggest that officials from both countries have ironed out a preliminary framework ahead of a possible meeting between US President Donald Trump and Chinese President Xi Jinping.
“As trade tensions thaw, investors are shifting away from defensive assets like bullion toward equities and other riskier instruments,” said Tim Waterer, Chief Market Analyst at KCM Trade. “A de-frosting of US–China trade relations has somewhat pulled the rug out from under the gold price due to a decline in safe-haven buying flows.”
The US dollar’s recent strength has also put downward pressure on bullion. The greenback has firmed ahead of the Federal Reserve’s policy meeting and amid upbeat earnings from major US companies. Since a stronger dollar makes gold and silver more expensive for buyers using other currencies, global demand has softened.
“Gold is down 3% back below $4,000 per ounce, and silver by 4%,” said Vikram Kasat, Head of Advisory at PL Capital. With global equities scaling record highs — Japan’s Nikkei crossing 50,000 and US indices near all-time peaks — investors are finding fewer reasons to hold non-yielding assets like gold and silver.
Domestic market mirrors global trends
In India, bullion prices are moving in line with international trends. “While gold remains a safe-haven asset, its short-term bias seems guarded. Investors may wait for clearer signals before increasing exposure,” said Aksha Kamboj, Vice President, India Bullion & Jewellers Association (IBJA).
Currently, 24-karat gold trades at around Rs 1,21,000 per 10 grams, reflecting both profit-booking and the impact of a stronger dollar. Silver, meanwhile, is priced near Rs 1,45,000 per kilogram, down from recent peaks.
Silver’s dual role — as both an industrial and precious metal — has left it vulnerable to weaker industrial demand and cooling investor sentiment. “Silver retains long-term upside potential, but a cautious, buy-on-dips strategy is advisable given its volatility,” Kamboj added.
Long-term fundamentals are strong
Despite the pullback, gold has gained nearly 53% this year, touching an all-time high of $4,381 per ounce in October, supported by central bank buying, geopolitical uncertainty, and interest rate cut expectations. Silver, too, remains among 2025’s top-performing commodities, buoyed by its growing use in clean energy and electronics.
Market watchers view the current correction as a pause, not a reversal. “A stronger dollar, declining physical demand in Asia, and profit booking at recent highs all contributed to the correction,” said Dr Renisha Chainani, Head of Research at Augmont. “Yet, gold’s overall outlook remains optimistic, underpinned by fiscal uncertainty and ongoing central bank accumulation.”
Technically, gold is expected to consolidate between ₹1.20 lakh and ₹1.24 lakh per 10 grams in the near term, with potential for a 3–4% move if it breaks either side. For silver, ₹1.44 lakh per kg remains a strong support, while resistance is seen around ₹1.50 lakh.
As India heads into the Diwali and wedding season, even a modest dip could reignite demand. Retail jewellers report steady footfall and anticipate brisk buying if prices ease further — a sign that, for Indian households, gold’s allure remains as strong as ever.
After a record-breaking rally that propelled gold to new highs earlier this month, the yellow metal is cooling off. December gold futures are trading near Rs 1.21 lakh per 10 grams, while silver has slipped to Rs 1.43 lakh per kilogram on the Multi Commodity Exchange (MCX), marking one of the sharpest weekly declines in months.
According to analysts, this pullback was both expected and healthy after an extraordinary surge that took gold from nearly Rs 75,000 to Rs 1.30 lakh in just a few months. A 10–15% correction was anticipated, which could bring prices closer to Rs 1.15 lakh per 10 grams before stabilising again.
Trade optimism cools
The key factor weighing on gold and silver is renewed optimism over a potential US–China trade deal. Reports suggest that officials from both countries have ironed out a preliminary framework ahead of a possible meeting between US President Donald Trump and Chinese President Xi Jinping.
“As trade tensions thaw, investors are shifting away from defensive assets like bullion toward equities and other riskier instruments,” said Tim Waterer, Chief Market Analyst at KCM Trade. “A de-frosting of US–China trade relations has somewhat pulled the rug out from under the gold price due to a decline in safe-haven buying flows.”
The US dollar’s recent strength has also put downward pressure on bullion. The greenback has firmed ahead of the Federal Reserve’s policy meeting and amid upbeat earnings from major US companies. Since a stronger dollar makes gold and silver more expensive for buyers using other currencies, global demand has softened.
“Gold is down 3% back below $4,000 per ounce, and silver by 4%,” said Vikram Kasat, Head of Advisory at PL Capital. With global equities scaling record highs — Japan’s Nikkei crossing 50,000 and US indices near all-time peaks — investors are finding fewer reasons to hold non-yielding assets like gold and silver.
Domestic market mirrors global trends
In India, bullion prices are moving in line with international trends. “While gold remains a safe-haven asset, its short-term bias seems guarded. Investors may wait for clearer signals before increasing exposure,” said Aksha Kamboj, Vice President, India Bullion & Jewellers Association (IBJA).
Currently, 24-karat gold trades at around Rs 1,21,000 per 10 grams, reflecting both profit-booking and the impact of a stronger dollar. Silver, meanwhile, is priced near Rs 1,45,000 per kilogram, down from recent peaks.
Silver’s dual role — as both an industrial and precious metal — has left it vulnerable to weaker industrial demand and cooling investor sentiment. “Silver retains long-term upside potential, but a cautious, buy-on-dips strategy is advisable given its volatility,” Kamboj added.
Long-term fundamentals are strong
Despite the pullback, gold has gained nearly 53% this year, touching an all-time high of $4,381 per ounce in October, supported by central bank buying, geopolitical uncertainty, and interest rate cut expectations. Silver, too, remains among 2025’s top-performing commodities, buoyed by its growing use in clean energy and electronics.
Market watchers view the current correction as a pause, not a reversal. “A stronger dollar, declining physical demand in Asia, and profit booking at recent highs all contributed to the correction,” said Dr Renisha Chainani, Head of Research at Augmont. “Yet, gold’s overall outlook remains optimistic, underpinned by fiscal uncertainty and ongoing central bank accumulation.”
Technically, gold is expected to consolidate between ₹1.20 lakh and ₹1.24 lakh per 10 grams in the near term, with potential for a 3–4% move if it breaks either side. For silver, ₹1.44 lakh per kg remains a strong support, while resistance is seen around ₹1.50 lakh.
As India heads into the Diwali and wedding season, even a modest dip could reignite demand. Retail jewellers report steady footfall and anticipate brisk buying if prices ease further — a sign that, for Indian households, gold’s allure remains as strong as ever.