Gold and Silver Prices Drop in India: Why Precious Metals Are Falling in 2025
Gold and Silver Prices in India fall sharply after record highs. Explore reasons, global trends, and market outlook for 2025’s metal correction.
Gold and Silver Prices in India See Major Correction
TheInterviewTimes.com | New Delhi | November 8, 2025 — After an unprecedented rally in October 2025, Gold and Silver Prices in India have witnessed a steep correction over the past three weeks. The surge that pushed 24-carat gold close to ₹1.35 lakh per 10 grams during Diwali has reversed sharply, with prices dropping to about ₹1.21 lakh by November 8—a fall of more than ₹14,000. Silver, too, mirrored this decline, slipping nearly ₹45,000 per kg to trade around ₹1.45 lakh per kg.
Key Points
- Gold and Silver Prices in India dropped sharply after record highs in October 2025.
- Strong U.S. dollar and delayed Fed rate cuts have reduced global metal demand.
- Domestic jewellery demand fell 31% year-on-year due to high prices.
- India’s 2025 gold demand is projected at 600–700 tonnes, below 2024’s 802.8 tonnes.
- RBI’s gold reserves rose to 880 tonnes amid global economic uncertainty.
Strong Dollar and Fed Policy Pressure Gold and Silver Prices
The primary reason behind the recent decline in Gold and Silver Prices is the strengthening of the U.S. dollar. The U.S. Dollar Index touched a three-month high after the Federal Reserve signaled that interest rate cuts may not happen soon. Investors have revised their expectations: by early November, the probability of a December rate cut fell from near certainty to roughly 65%.
A stronger dollar makes gold and silver more expensive for foreign buyers, thereby reducing demand globally, including in India. Alongside this, geopolitical tensions have eased, festive-season buying has waned, and profit booking has accelerated after the extraordinary price rally seen earlier in 2025.
As a result, demand for non-yielding assets such as precious metals has weakened in favor of bonds and other income-generating instruments.
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Consumer Demand Weakens as Prices Stay Elevated
According to the World Gold Council, India’s gold demand dropped by 16% year-on-year between July and September 2025. The biggest decline came in jewellery purchases, which fell 31%, mainly because high Gold and Silver Prices discouraged traditional buyers.
Despite this, the total value of gold bought rose 23% as consumers who did purchase paid significantly more per gram. Interestingly, investment demand—especially for gold bars and coins—rose 20% in volume and 74% in value, reaffirming gold’s role as a trusted store of wealth.
The Council forecasts that India’s annual gold demand will reach between 600 and 700 tonnes in 2025, notably below the 2024 total of 802.8 tonnes. Nevertheless, India remains the world’s second-largest gold consumer, after China.
Economic Impact of Falling Gold and Silver Prices
The ripple effects of fluctuating Gold and Silver Prices extend far beyond household budgets. Since India imports around 86% of its gold, weaker domestic demand can slightly ease the current account deficit. However, gold continues to serve as a financial safety net during uncertain times.
The Reserve Bank of India (RBI) has increased its gold holdings to 880 tonnes in 2025, emphasizing its strategic value as a reserve asset. Meanwhile, new gold reserves discovered in Odisha, Madhya Pradesh, and Andhra Pradesh are expected to gradually reduce dependence on imports, though commercial production from these sources may take several years.
Outlook for Gold and Silver Prices in 2025
Market experts anticipate that Gold and Silver Prices will continue to show short-term volatility. With the U.S. Federal Reserve adopting a cautious stance on interest rate adjustments and the Indian rupee facing mild depreciation, precious metals are likely to remain under mild pressure.
Seasonal recovery may appear during India’s upcoming wedding season, traditionally a strong period for gold sales. However, given the speed of the recent price rally and subsequent correction, both traders and consumers are expected to remain cautious.
In the long term, global monetary policies, investor sentiment, and India’s evolving economic landscape will collectively determine the next phase of the country’s gold and silver market.