Summary of this article
Gold and silver prices declined on Dhanteras on account of multiple factors
Know what investors should do amid the declines.
Gold And Silver Price Today: The prices of physical gold and silver declined on October 18 after a significant rally. The declines came amid the festivities of Dhanteras, which is considered an auspicious occasion to buy precious metals such as gold and silver. As per Hindu tradition, purchasing these metals on the auspicious date is believed to invite prosperity and good fortune.
On October 18, the price of 24 karat gold fell by Rs 191 to Rs 13,086 per gram, the price of 22 karat gold declined by Rs 175 to Rs 11,995, and the price of 18 karat gold declined by Rs 144 per gram to Rs 9,814 as per the Goodreturns website.
On the other hand, silver prices also witnessed significant declines, as the price declined from Rs 13,000 to Rs 1,72,000 per kilogram. Notably, the price of physical silver has declined consistently for the past three days after witnessing a stellar surge in the last week of September and the first week of October, driven by a supply shortage and strong festive demand. In the previous three days, the price of silver has reduced by as much as Rs 18,000 per kilogram between October 16 and October 18.
On the other hand, the rally in gold prices came to a sharp halt, and the decline is seen today. Gold prices have witnessed continuous gains between October 11 and October 18. The price of 22 karat gold surged by Rs 906 per gram in the recent rally, and the price of 24 karat gold rose by Rs 825 per gram.
On the Multi Commodity Exchange, Gold futures with December 5 expiry fell to a low of Rs 1,25,957 per 10 grams on October 17. On the other hand, silver futures with December 5 fell to an intraday low of Rs 1,53,929 per kg. Notably, both commodities recovered slightly to close in the green. However, both silver and gold have declined significantly from their all-time highs, which they hit recently.
Why Are Silver And Gold Prices Falling
Gold and silver prices are declining after a stellar run on account of several factors such as profit-booking by investors, declining volatility and easing investor concerns regarding geopolitical tensions. A stronger US dollar also played into the correction seen in silver and gold prices.
Profit-Booking
Gold and silver investors raked in the gains on October 17 resulting in a decline in the prices of the precious metals. The selloffs were triggered by concerns regarding further rise in gold and silver prices. Thus amid the concerns, investors sold gold and silver to lock in profits, leading to a correction in the market.
De-escalations In Global Tensions
One of the key triggers that will push gold prices and silver prices higher in 2025 is the demand for safe-haven assets. Notably, this demand has moderated amid a decline in uncertainty and de-escalations in global trade tensions. Recent changes in the USA's stance regarding the imposition of trade tariffs on China and the escalation of the conflict between Israel and Palestine have also led to a decline in the demand for safe-haven assets as investor sentiment improved, redirecting funds towards assets with higher risk profiles.
Stronger US dollar
The strengthening of the US dollar also led to gold and silver becoming more expensive for buyers using other currencies, dampening demand. A stronger dollar typically has an inverse relationship with the price of precious metals. Notably, the US dollar has become stronger against the Indian rupee in the last two sessions, adding to the decline in gold prices.
What Should Investors Do Amid Declines
The decline presents respite for buyers who are likely to get a better deal at reduced prices. Investors, on the other hand, must exercise caution while investing in precious metals at the current levels. Jashan Arora, Director, Master Trust Group, told Outlook Money that investors should not buy aggressively at current levels.
"Investors are advised to avoid aggressive buying at the current levels. Modern investment avenues offer low-cost, liquid, and transparent access to the metal without the challenges of physical storage," Arora said.
Arora advised investors to not increase their exposure to precious metals beyond 10 to 15 per cent of their total portfolio to achieve the right profile between risk protection and long-term appreciation.
"Ideally, precious metals should account for about 10–15 per cent of an investor's portfolio, striking the right balance between risk protection and long-term value appreciation. Gold and silver continue to play a vital role as safe-haven assets, offering stability during uncertain economic conditions and serving as a reliable hedge against inflation," Arora said.
