Gold and Silver Prices Calm While Jewelry Sales Surge by 35-40%

In the international market, gold prices eased after reaching record highs on Monday.

Mumbai: Gold and silver prices dropped on Tuesday as investors took profits after both metals reached record highs in the previous session, even as festive jewelry sales during Dhanteras rose 35-40 percent across India. Newsreport gathered.

Silver Exchange-Traded Funds (ETFs), which had delivered impressive one-year returns of around 65–70 percent, also experienced a sharp correction as global prices cooled following increased physical supply and easing safe-haven demand. Silver had surged earlier this month when global spot prices exceeded $40 an ounce amid worries of a physical shortage. The rally extended further, crossing $50 in mid-October.

However, by the end of last week, prices started to retreat as easing trade tensions lowered safe-haven demand. On October 17, silver prices in the US fell more than 6 percent, and this correction soon impacted Indian markets. According to the India Bullion and Jewellers Association (IBJA), silver prices in India fell 7 percent on October 20, dropping from Rs 1,71,275 per kg to Rs 1,60,100 per kg.

This decline directly affected silver ETFs, which track domestic silver prices. Data from Ace MF shows that silver ETFs experienced significant single-day losses, with most funds dropping up to 7 percent on October 20. Analysts observed that the ETFs are now trading at or below fair value — a sign that investor demand has started to slow after months of strong inflows.

Meanwhile, in the international market, gold prices also declined after reaching record highs on Monday. Spot gold was down 0.3 percent at $4,340.29 per ounce as of 0248 GMT, after hitting an all-time high of $4,381.21 in the previous session. US gold futures for December delivery eased 0.1 percent to $4,356.40 per ounce, as investors booked profits amid expectations of further interest rate cuts by the US Federal Reserve.

The Multi Commodity Exchange (MCX) will also conduct special Muhurat trading today, October 21, with a pre-open session from 1:30 p.m. to 1:44 p.m., followed by the Muhurat trading window from 1:45 p.m. to 2:45 p.m Despite the short-term correction, festive demand for gold and silver remains strong. The All India Gem & Jewellery Promotion Council said that around 50 to 60 tonnes of jewelry were sold nationwide over the two days of Dhanteras, generating nearly Rs 85 crore in sales.

It added that while the sales volume was similar to last year, the overall value increased by 35–40 percent due to higher prices and rising consumer interest. “Silver, in particular, has seen a remarkable surge, with sales nearly doubling this season. With Dhanteras coinciding with the weekend and followed by Diwali and Bhau Beej, the five-day festive period is expected to deliver exceptional results,” it mentioned.

“We anticipate total jewelry sales reaching 100 to 120 tonnes, valued between Rs 1 lakh crore and Rs 1.35 lakh crore,” they said.