Gold Falls 1.65%, Silver Slumps 4.47% Ahead Of Dhanteras; What Is Driving The Sharp Price Decline?

Gold and silver extended their losing streak on Tuesday, 3 November, just as the Dhanteras buying season approached. The decline comes at a significant juncture. Consumers are preparing for festive shopping and wedding purchases, while persistently high prices have made jewellery less affordable in recent months.

Selling pressure was visible on the Multi Commodity Exchange (MCX). Both precious metals slipped, although silver suffered a steeper setback than gold.

The timing is particularly important for the domestic jewellery trade. Dhanteras traditionally brings a surge in physical gold and silver purchases. But domestic prices are still subject to international economic trends that still move markets.

Gold And Silver Prices Today: Latest MCX Rates

What Is Behind The Fall In Precious Metal Prices?

Precious metals are facing mounting pressure. A stronger US dollar, firmer bond yields and weakness across international markets have weighed on prices. Shifting views on US monetary policy have added to investor uncertainty.

Rising bond yields have made gold and other non-interest-bearing assets less appealing. Inflation worries have compounded the pressure. So have expectations of tighter monetary policy, prompting a broader price correction.

Silver has had another setback following its steep October correction. Gold, meanwhile, has struggled to retain its safe-haven lustre. Geopolitical tensions persist, but they have done little to arrest its decline.

Will Lower Prices Boost Dhanteras Jewellery Demand?

The correction has brought some relief to consumers, although affordability remains central to purchasing decisions.

Colin Shah, Managing Director of Kama Jewelry, said buyers are increasingly shifting towards lightweight studded jewellery in the 9K to 19K purity range. Demand for natural and lab-grown diamonds has remained concentrated in the ₹1.5 lakh-₹3 lakh segment.

He expects jewellery demand by value to remain broadly comparable with last year, although volumes could decline by around 10%.

Online jewellery shopping is also witnessing increased festive interest, with consumers exploring gold and silver jewellery, coins, pendants and decorative pieces. The festive jewellery market is finding fresh buyers outside major metropolitan centres. Smaller cities are gaining ground, with Tier 2 and Tier 3 consumers taking a greater interest in seasonal purchases.

Physical Gold, Digital Gold Or Gold ETFs: Understanding The Options

• The choice of gold purchase also depends on ownership, costs and intended use.

• Physical gold: Jewellery and coins provide tangible ownership but involve making charges, hallmarking requirements and storage considerations.

• Digital gold: Allows purchases in smaller amounts without physical storage, subject to platform charges and redemption conditions.

• Gold Exchange-Traded Funds (ETFs): Provide market-linked exposure to gold without physical possession and trade on stock exchanges.

• Gold mutual funds: Offer another investment route, including for investors without a demat account.

Festive buying is therefore taking place against two contrasting trends: softer precious metal prices and continued pressure on household jewellery budgets.

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