Gold, silver prices fall sharply; experts predict rebound by Diwali

Gold and silver prices declined sharply on October 12–13, 2026, with gold falling ₹1,750 over two days and silver dropping ₹1,700. According to the India Bullion and Jewellers Association (IBJA), gold fell to ₹1.48 lakh per 10 grams, while silver declined to ₹2.20 lakh per kilogram on the Multi-Commodity Exchange (MCX).

The primary driver of the decline is elevated retail inflation, which reached 5.54% in September 2026—the highest level in 22 months. When retail inflation remains elevated, central banks typically maintain or raise interest rates, making fixed-income investments more attractive than non-yielding assets such as gold and silver. Additionally, stronger US dollar valuations and recent US Federal Reserve rate hikes have created headwinds for precious metals globally. Retail demand has also weakened as consumers allocate more of their budgets to essential goods amid inflationary pressures.

Despite current weakness, analysts including commodity expert Ajay Kedia predict a potential price recovery ahead of Diwali. Kedia cited festive season demand in India and China, along with central bank purchases globally, as supporting factors. Kedia projected gold could reach ₹1.55 lakh per 10 grams and silver ₹2.40 lakh per kilogram by Diwali.

In broader context, silver has fallen dramatically from its all-time high of ₹4.20 lakh per kilogram reached in late January 2026, now trading approximately ₹1.96 lakh below that peak. Gold, meanwhile, has experienced significant volatility throughout 2026, rising ₹15,000 year-to-date from its December 2025 level of ₹1.33 lakh per 10 grams, even as recent weeks have brought declines. Market observers suggest retail investors consider purchasing during sharp corrections, as persistent inflation and geopolitical uncertainty may eventually support precious metal prices.