Gold and Silver Recover as Domestic Rates Jump Up to Rs 1,000 Ahead of Festive Buying

Following four consecutive sessions of steep losses, domestic gold prices in India rebounded by up to Rs 1,000 for 24-carat and 22-carat metal as festive retail demand picked up.

Gold prices in India snapped a four-day losing streak to trade higher on Saturday, October 24. Pushed by renewed physical buying interest ahead of major festive milestones such as Dhanteras and Lakshmi Pujan during Diwali, both 24-carat and 22-carat gold rates advanced by as much as Rs 1,000 per 100 grams. Meanwhile, 18-carat gold posted an increase of at least Rs 800. The weekend recovery offered a slight pause to the sharp selloff seen earlier in the week, where prices across categories had tumbled significantly from October 20 to October 23.

Domestic Price Action Across Purity Categories
In the physical domestic market, 24-carat gold increased by Rs 1,000 per 100 grams to settle at Rs 14,25,800. For retail consumers purchasing in 10-gram units, the 24-carat rate climbed by Rs 100 to Rs 1,42,580. A parallel movement was seen in the jewelry-grade 22-carat segment, where 100-gram prices climbed by Rs 1,000 to reach Rs 13,07,000, lifting the standard 10-gram rate by Rs 100 to Rs 1,30,700. Rates for 18-carat gold also recorded an uptick of at least Rs 800 across market boards.

This rebound follows a sharp four-day slide. Between October 20 and October 23, 24-carat gold prices had plunged by Rs 55,600 per 100 grams and by Rs 5,560 per 10 grams. Over the identical four-day stretch, 22-carat gold prices suffered a drop of Rs 51,000 for 100 grams and Rs 5,100 for 10 grams. That broad price decline presented opportunistic entry points for household investors preparing for traditional holiday purchases.

Festive Demand Drives Domestic Sentiment
In India, the Diwali season represents a peak consumption window for precious metals, with Dhanteras and Lakshmi Pujan considered especially auspicious for acquiring bullion and jewelry. The deep four-day discount had lowered entry thresholds for buyers seeking to lock in purchases for the festive period. As consumer interest gathered pace heading into the weekend, physical retail buying translated into a halt in the domestic downward trend, lifting prices back into positive territory on October 24.

International Spot Metals Face Sustained Volatility
In foreign commodity exchanges, spot gold witnessed severe volatility, briefly dipping below the psychological threshold of $4,000 per ounce to touch $3,993.96, marking its lowest valuation since mid-July. The metal subsequently staged an intraday comeback to hover around $4,026 per ounce, offsetting earlier losses while still holding the previous day's 2.8% decline. On a week-on-week basis, spot gold declined by 4%.

Silver experienced an even steeper drawdown. Prices tumbled below $54 per ounce on Friday to trade near $53.5 per ounce, matching levels not seen since November 2025. This followed a steep 6% plunge during the preceding session. Because industrial manufacturing represents a major share of aggregate silver consumption, the metal remains particularly vulnerable to downside corrections whenever broad market risk sentiment deteriorates.

Broad-Based Liquidation and Asset Class Dynamics
Kaynat Chainwala, AVP of Commodity Research at Kotak Neo, noted that spot gold slid under $4,000 an ounce despite US 10-year Treasury yields dipping below 5%. The downward movement was primarily driven by systematic liquidation, as investors unwound artificial intelligence and broader technology equity holdings to raise liquidity amid a heavy selloff in stock markets. While lower bond yields typically provide support for non-yielding bullion, heightened stress in equity markets often compels market participants to sell liquid assets like gold to cover immediate cash obligations. Even so, the fundamental safe-haven status of bullion remains resilient over the broader horizon.

Chainwala also highlighted that rising crude oil quotations have rekindled fears of inflation, cementing expectations that monetary authorities in the United States will keep interest rates higher for an extended duration. This macro backdrop has subjected both gold and silver to persistent selling pressure throughout the month.

Crude Oil Spikes to Four-Year Peak on Middle East Clashes
Surging crude oil markets added further complexity to global macroeconomic conditions. US WTI crude futures gained nearly 4% overnight to finish at $103.27 per barrel, posting a weekly gain exceeding 1.5%. Concurrently, Brent crude rallied over 3% in a single session to close the week at $116.72 per barrel, hitting a four-year peak.

The price spike followed an escalation in Middle East geopolitical confrontation. Ongoing strikes by Iran-allied Houthi forces targeting Saudi Arabia exacerbated worries surrounding energy transport and production. In response to security conditions, the US State Department directed non-essential diplomatic staff to depart Saudi Arabia, while national oil enterprise Saudi Aramco evacuated its Dhahran corporate headquarters and instructed staff to work remotely. Meanwhile, Iran's military chief declared that armed forces were fully prepared for asymmetric warfare following upgrades to their combat capabilities. US President Donald Trump stated that Washington was not engaged in talks with Tehran and indicated that events would unfold fairly soon, while expectations circulated that the US and Israel might initiate fresh military strikes following midterm elections.

Federal Reserve Outlook and Inflation Gauges
Global financial attention now pivots toward the US Federal Reserve's monetary policy gathering on October 27-28. Financial markets anticipate that Kevin Warsh will maintain policy rates unchanged at the conclusion of the meeting on October 28. Current pricing on the CME FedWatch Tool assigns just a 10% probability to an interest rate hike in the upcoming October gathering, while the probability of a rate hike in December stands at approximately 80%.

Recent economic indicators from the United States revealed consumer and wholesale price indices increasing at a faster clip than anticipated, largely propelled by high fuel and energy costs. The figures have reinforced concerns about persistent inflation. Market participants are watching the US PCE inflation release slated for October 29 to evaluate progress toward the Fed's 2% long-term inflation benchmark.

What this means for you
This price movement directly affects retail jewelry shoppers, household festive budgets, and commodity investors navigating the holiday period.

• For jewelry buyers: The Rs 100 per 10-gram rise in 22-carat and 24-carat metal only slightly offsets the massive Rs 5,000-plus drop recorded between October 20 and 23. Consumers shopping for Dhanteras and Diwali still enjoy substantially lower base prices compared to the previous week.
• For silver consumers: Global silver sliding below $54 per ounce keeps retail silverware and bullion coin prices restrained. Industrial headwinds suggest that silver prices may remain under pressure in the near term.
• For household inflation: Brent crude surging to a four-year high of $116.72 per barrel increases the risk of higher retail fuel and logistics costs. Sustained energy inflation could spill over into transport tariffs and household consumer goods.
• For bullion investors: With spot gold consolidating around the $4,000 level and the Federal Reserve meeting on October 27-28, market swings will remain elevated. Staggered accumulation during sharp dips remains a prudent strategy ahead of the October 29 US PCE inflation report.

Why this happened
The sudden cross-asset movements across precious metals and energy benchmarks stem from escalating Middle East tensions, tech equity liquidation, and shifts in US interest rate expectations.

• Festive demand turnaround: After domestic gold plunged by Rs 55,600 per 100 grams over October 20-23, Indian buyers capitalized on discounted levels ahead of Dhanteras and Diwali. This domestic physical demand drove the Rs 1,000 rebound on October 24.
• Tech liquidation triggering margin calls: Sharp declines in artificial intelligence and technology equities forced institutional investors to raise cash across liquid assets. Despite US 10-year Treasury yields dipping under 5%, heavy portfolio rebalancing briefly pushed spot gold below $4,000 an ounce.
• Crude supply shocks and geopolitical risks: Houthi military actions in Saudi Arabia and tensions involving Iran propelled Brent crude to $116.72 per barrel. Skyrocketing oil sparked renewed inflation concerns, solidifying views that US interest rates will stay higher for longer and dampening non-yielding metals.
• Pre-Fed positioning: Ahead of the Federal Reserve's October 27-28 meeting, markets price in only a 10% chance of an October rate hike but an 80% probability for December, keeping gold and silver volatile ahead of upcoming PCE data.

Questions & Answers

1. How much did 24-carat and 22-carat gold rates increase on October 24?
Prices for both 24-carat and 22-carat gold rose by Rs 1,000 per 100 grams, translating to a Rs 100 rise per 10 grams.

2. How much did gold drop between October 20 and October 23?
Across those four days, 24-carat gold slumped by Rs 55,600 per 100 grams, while 22-carat gold plunged by Rs 51,000 per 100 grams.

3. What were the latest international spot levels for gold and silver?
Spot gold briefly dipped to $3,993.96 before recovering to around $4,026 per ounce, while silver tumbled to $53.5 per ounce.

4. Why did crude oil prices reach a four-year peak?
Crude surged after Houthi attacks in Saudi Arabia and heightened Middle East military friction pushed Brent crude to $116.72 per barrel.

5. What are markets pricing in for the upcoming Federal Reserve meeting?
Traders assign only a 10% probability to a rate hike at the October 27-28 meeting, compared to roughly 80% odds for December.

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