Gold and silver prices defied expectations, hitting record highs earlier this month. But the rally has quickly given way to a sharp correction, and both metals seem to be entering a phase of heightened uncertainty, with analysts cautious about short-term forecasts, though few see the fall as a reversal of the rally. Gold fell from its peak of around ₹1.11 lakh for 10 grams to about ₹1.04 lakh on Friday, while silver dropped from nearly ₹1.70 lakh a kilo to ₹1.59 lakh. Globally, gold saw its steepest one-day fall in more than a decade—over 5.7 percent—ending a nine-week winning streak. Silver, buoyed earlier by festive demand, too fell more than six percent, marking its sharpest drop since March.
If geopolitical tensions, expectations of aggressive rate cuts, heavy central-bank buying, and robust ETF inflows drove the rally, a stronger dollar, profit-taking, and easing fiscal concerns in the US are now dragging prices down. The prospect of the US government averting a prolonged shutdown, along with uncertainty over the Federal Reserve’s stance, has further cooled investor appetite for safe havens. Inflation readings in key economies and the Fed’s policy cues next week will be watched closely, as lower real interest rates typically lend renewed strength to gold.
Yet, despite the plunge, gold has gained over 50 percent so far this year. Markets too view the decline as a pause, not a reversal, in a broader bull phase shaped by macroeconomic and geopolitical flux. Persistent conflicts, disruptions in trade flows, and anxiety over the global currency order continue to underpin the appeal of tangible assets. US sanctions on Russian oil majors, possible export curbs on China, and tightening supplies of strategic minerals have only reinforced the case for holding precious metals as insurance against shocks.
Above all, central banks remain the strongest pillar of support. The World Gold Council estimates net official purchases at around 900 tonnes in 2025—the fourth consecutive year of above-average buying. As long as they keep adding to reserves, gold will hold its ground as a reliable long-term store of value for both institutions and retail investors, even as short-term corrections test nerves and conviction.
