Major drop in gold and silver prices ahead of Diwali

A significant decline in gold and silver prices is being observed in the market ahead of the auspicious festivals of Dhanteras and Diwali. According to a report by Amar Ujala, a sharp drop was recorded in gold and silver prices on the Multi Commodity Exchange (MCX) on Tuesday. Prices fell by more than ₹4,400 immediately upon the market opening. Around 10 AM on Tuesday, gold with December delivery was trading at ₹1,38,875 per 10 grams on MCX, representing a decline of ₹1,386. Silver prices faced a heavier blow, with December delivery silver falling by more than 2% to ₹1,79,200 per kilogram, a decline of ₹4,429.

According to a report by TV9 Gujarati, gold prices in Ahmedabad have seen an increase, but a long-term decline has been observed. On 3 November 2026, the price of 24-carat gold in Ahmedabad is ₹1,39,690 per 10 grams. Along with this, the price of 22-carat gold is ₹1,28,050 and 18-carat is ₹1,04,770. An increase of 0.19% in 24-carat and 18-carat, and 0.20% in 22-carat was observed. However, on 3 October 2026, the price of 24-carat gold was ₹1,49,230, compared to which today's price has decreased by ₹9,540.

The last 10 days' records of gold prices in Ahmedabad are also significant. According to a report by TV9 Gujarati, the highest gold prices in the last 10 days were recorded on 28 and 29 October, when 24-carat gold was ₹1,44,000, 22-carat was ₹1,32,000, and 18-carat was ₹1,08,000. Meanwhile, the lowest prices were recorded on 31 October and 1 November 2026, where 24-carat was ₹1,38,930, 22-carat was ₹1,27,350, and 18-carat was ₹1,04,200.

Furthermore, the cost difference between physical gold and Gold ETF in Ahmedabad is also notable. The base price of 24-carat gold is ₹1,39,690 and 3% GST (₹4,190.70) are the same, but with the addition of making, wastage, and hallmarking charges, physical gold costs between ₹1,63,472.30 and ₹1,76,209.40, whereas Gold ETF, without these additional costs, is between ₹1,40,388.45 and ₹1,41,086.90.

According to a report by BBC Hindi, several global reasons are responsible for this decline in precious metal prices. For the second consecutive month, negative returns have been recorded in precious metal prices. Rising crude oil prices, fears of increasing inflation, and concerns over potential interest rate hikes in the US have increased pressure on the market. Additionally, a decline in tech company stocks has also been observed, due to concerns regarding returns on expenditure towards Artificial Intelligence.

Bas Kuizman of DHFL Capital stated in a note that expectations of tight monetary policy put pressure on assets that do not yield interest or regular income. Similarly, concerns regarding rising inflation due to strong oil prices are increasing. If oil prices decrease, the pressure on gold may ease, but US employment figures and supply chain disruptions could change this situation.

A decline in gold prices was also observed on COMEX in the global market. According to a report by BBC Hindi, by the end of October, the price of gold on COMEX had fallen 7.26% to $3,884.9 per ounce. Gold has also broken the technical support level of $3,900 and may now fall to the support level of $3,650-$3,750, while it will need to cross the $4,550 level to recover. Silver prices also recorded a decline of 19.1% and closed at $49.13 per ounce. After the $54 support for silver broke, it reached $48.9 and may now fall to $42-$43. Gold prices have fallen 30% from the record level of $5,595 in January.

According to a report by Reuters, there is pressure on gold due to fears that US interest rates will remain high for a long time and weak demand in Asia. However, according to analysts, when the price of gold goes below $4,000, there is a possibility of increased buying by central banks. According to HSBC, demand for silver in industry and jewelry is declining. The bank expects the average price of silver to be $64 per ounce in 2027, while the estimate for this year is $71. Currently, 79 ounces of silver are required for one ounce of gold, which is an 11-month high ratio. In January, this ratio was 46.

According to Jatin Trivedi of ALKP Securities, USA, volatility in precious metals will continue until there is clarity regarding the US Federal Reserve's monetary policy and interest rate cuts. However, this decline could be a good opportunity for customers for Dhanteras and Diwali shopping.

A mixed situation is also being observed in the local market. According to a report by Sandesh, there is a lack of demand in the market of Jarod village in Vaghodia taluka of Vadodara, despite the upcoming Diwali festival. Traders have stocked goods but are waiting for customers. Firecracker shops have opened, there is an attraction for fridges in electronics, and stalls for the sale of rangoli and diyas have also started. Clothing traders are also ready with stock, but traders are worried due to low demand in the market.

Meanwhile, the Gujarat government has declared a holiday on 9 November for the Diwali vacation, while offices will work on 28 November, as reported by the Times of India.

COMEX (Commodity Exchange Inc) was the main market in the US where gold and silver contracts were traded. While MCX (Multi Commodity Exchange) was India's exchange where gold and silver futures were traded.