When All India Sarafa Union reported a jump of ₹3,200 per 10 g on Friday, 18 October 2025, traders across the capital felt the heat of a seasonal buying frenzy. The rise pushed 99.9 % pure gold to a fresh high of ₹1,34,800 per 10 g, while 99.5 % gold settled at ₹1,34,200 – both figures eclipsing the previous day’s closing levels of ₹1,31,600 and ₹1,31,000 respectively. In the same breath, silver slipped by roughly ₹7,000 to ₹1,77,000 per kilogram, a noticeable dip after a brief rally.
Background: Indian Gold and Silver Markets
India’s bullion market has long been tied to festivals – the glitter of Diwali, the auspiciousness of Dhanteras, and the promise of good fortune. Historically, the demand for jewellery spikes in the weeks leading up to the festival, pushing prices upward. Yet the dynamics are never one‑dimensional; global cues, especially U.S. fiscal news, ripple through the local market within minutes.
According to the India Bullion and Jewellers Association, the sector moved roughly ₹12 billion in sales during the Dhanteras window of 2025, a 4 % increase over the same period last year. However, while gold purchases surged, silver‑related transactions – mainly coins and small jewellery pieces – outperformed gold in sheer volume.
Price Surge on Dhanteras
The day before the main Diwali celebrations, Delhi’s historic Sarafa Bazaar lit up with customers trading in cash and digital wallets alike. CS Surendra Mehta, National Secretary of India Bullion and Jewellers Association, said the market was "extremely volatile" and that "silver plunged $2 in a single session before clawing back, while gold carved out a new high." He cautioned that such a pronounced swing was unlikely to repeat in the coming week.
Data from a popular YouTube price‑tracker showed that on 19 October 2025, 1 g of gold fetched ₹12,958, 8 g sold for ₹13,664, 10 g reached ₹1,29,580 and 100 g commanded ₹12,95,800. By contrast, silver’s numbers stood at ₹149.97 per gram, ₹1,199.74 for 8 g, and ₹1,499.68 for 10 g – a modest spread from the previous week’s peaks.
Expert Commentary
Market analysts point to three converging factors behind the rally:
- Festive buying pressure: Retail jewellery shops reported inventory turnover rates 30 % above average, driven by consumers seeking gold as a traditional gift.
- U.S. government shutdown: The unexpected closure of several federal agencies on 18 October triggered a flight‑to‑safety, lifting demand for precious metals globally.
- Federal Reserve outlook: While the Fed’s policy stance remains dovish, speculation of a rate cut later in the year keeps investors eyeing gold as a hedge.
"Post‑Diwali, we expect a modest correction – perhaps a 1‑2 % dip – but the longer‑term trajectory will hinge on Fed cues and domestic fiscal measures," remarked Ritika Sharma, senior analyst at KPMG India.
Regional Market Snapshots
Beyond Delhi, the bullion hubs of Bhopal and Indore mirrored the capital’s trends. In Bhopal, 24‑carat gold touched ₹1,27,471 per 10 g on 16 October, and by the 18th had climbed to the same level as Delhi. Silver in Indore fell to ₹1,77,200 per kilogram – a near‑identical dip to the national average.
Local jewellers in these cities reported that while bulk gold purchases softened after Dhanteras, smaller denominations (e.g., 5 g and 8 g bars) continued to see steady demand, suggesting a shift toward affordable gifting.
Looking Ahead: What Drives Future Prices?
Forecasts for the next quarter hinge on two main variables. First, the Fed’s monetary policy meetings slated for November and December could either buoy or temper bullion demand, depending on whether interest rates stay unchanged or see a cut. Second, domestic fiscal policy – particularly any new GST adjustments on jewellery – could directly affect consumer pricing power.
Investors are also watching the looming “post‑festival slump.” Historically, gold prices dip 1‑3 % after Diwali as the buying impulse wanes. However, with global uncertainties persisting, the correction may be shallower than in previous years.
Key Facts
- Date of peak: 18 Oct 2025 (Dhanteras)
- Gold (99.9 %): ₹1,34,800 per 10 g
- Gold (99.5 %): ₹1,34,200 per 10 g
- Silver: ₹1,77,000 per kg (down ₹7,000)
- Primary drivers: Festive demand, US shutdown, Fed outlook
Frequently Asked Questions
How does the price surge affect small investors?
Small investors who bought gold before Dhanteras see a paper‑gain of roughly 2‑3 % on their holdings. However, those who entered the market at the new high may face short‑term volatility if the post‑festival correction materialises. Diversifying into silver or fiat‑linked instruments can cushion potential dips.
What caused the sudden rise in gold prices?
Three forces converged: an influx of cash‑rich shoppers for Dhanteras, a global risk‑off reaction to the U.S. government shutdown, and market speculation that the Federal Reserve may ease rates later in the year, all pushing investors toward gold as a safe‑haven asset.
How are silver prices expected to move after Diwali?
Silver is likely to stabilise near the current ₹1,77,000 per kg level. The festive surge in coin sales gave it a short‑term boost, but without the same cash‑flow intensity as gold, analysts project a modest 0.5‑1 % rise in the next two weeks, followed by a gentle drift aligned with global metal trends.
What role did the U.S. government shutdown play?
The shutdown sparked uncertainty in foreign exchange and equity markets, prompting investors worldwide to shift capital into tangible assets. In India, this translated into a rapid inflow into gold, lifting its price by several hundred rupees within hours of the news breaking.
When might the Fed's policy impact Indian bullion markets?
The next Fed meeting on 20 November 2025 is a key date. If the central bank signals a rate cut, Indian gold could see an additional 1‑2 % uptick. Conversely, a hawkish tone might dampen the rally, potentially triggering the post‑Diwali correction earlier than expected.