After months of strong gains, gold and silver prices have slipped sharply in both global and Indian markets. On the MCX, 24-carat gold is currently trading near ₹1.18 lakh per 10 grams, while silver has dropped to around ₹1.40 lakh per kilogram — a steep fall from recent highs.
Globally, gold has fallen 11% from its record peak of $4,381 per ounce, while silver has tumbled over 16% from the $54 level.
Experts believe this correction was overdue, driven by a mix of profit booking, easing geopolitical tensions, and strength in global equity markets.
Top 5 Reasons Behind the Gold & Silver Price Crash
1. Reduced Safe-Haven Demand
Investors are moving away from safe-haven assets like gold and silver as US-China trade relations improve. Reports suggest that both nations are close to finalizing a trade deal, which has boosted confidence in riskier assets such as equities.
As a result, funds are flowing out of precious metals and into stock markets.
2. Strengthening US Dollar
The US dollar has strengthened ahead of the Federal Reserve’s policy meeting, supported by strong corporate earnings and steady US growth.
A stronger dollar makes gold and silver more expensive for foreign investors, leading to reduced global demand and added price pressure.
3. Profit Booking After Record Highs
Both metals had seen a strong rally through 2025. With gold delivering over 53% returns year-to-date, many investors have started booking profits, triggering a wave of selling across global markets.
This natural correction phase is typical after a long rally and can help prices stabilize before the next leg up.
4. Industrial Demand Weakness in Silver
Silver, unlike gold, also has a strong industrial component. Demand from the electronics and solar sectors has weakened in recent months due to slower order growth.
This decline in industrial consumption has amplified silver’s fall, pushing it down over 16% from its record peak.
5. Market Bubble Concerns
Some analysts had been warning that gold and silver prices were forming a short-term bubble due to excessive speculation.
As prices soared to record levels, cautious investors chose to stay away or reduce exposure — further increasing selling pressure.
Global Factors at Play
According to market strategist Tim Waterer of KCM Trade, optimism around trade negotiations between the US and China has “pulled the support line” from gold.
He notes that safe-haven flows are weakening as investors grow confident about global growth recovery.
Meanwhile, major stock indices — including Japan’s Nikkei 225, and US & European markets — are trading at or near record highs. With equities surging, non-yielding assets like gold and silver have lost some of their appeal.
Impact on Indian Market
The global decline has directly affected the Indian bullion market.
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Gold: On the MCX, 24-carat gold is now around ₹1.18 lakh per 10 grams, down from its recent highs due to dollar strength and profit booking.
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Silver: Silver has dropped to nearly ₹1.40 lakh per kilogram, pressured by weak global cues and declining industrial demand.
According to Aksha Kamboj, Vice President of the India Bullion & Jewellers Association (IBJA), “Gold remains a safe-haven asset, but the market is in a cautious phase. Investors are waiting for clear global signals before making fresh entries.”
What’s Next?
Despite the correction, experts maintain a positive long-term outlook for both metals.
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Gold’s fundamentals — including central bank buying, inflation concerns, and geopolitical risks — remain strong.
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Silver is expected to benefit from industrial growth and clean energy demand over the next few years.
Traders are closely watching the upcoming Federal Reserve meeting, where a potential interest rate cut could again support gold prices in the near term.
Investor Takeaway
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Short-term correction phases are normal after strong rallies.
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Long-term investors should view current levels as a buy-on-dips opportunity.
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Diversifying between gold and silver remains a smart strategy to balance stability and growth potential.
Even after this pullback, gold has been one of 2025’s best-performing assets, and silver continues to hold long-term promise.
Conclusion
The sharp fall in gold and silver prices marks a healthy market correction after months of record gains.
Improving trade relations, a stronger dollar, and profit-taking have driven the pullback, but the long-term story for precious metals remains intact.
For Indian investors, the message is clear — use volatility wisely. Accumulate gradually, stay patient, and let gold and silver continue to add shine to your long-term portfolio.
