On DhanterasUttar Pradesh, India, the nation’s most coveted buying day for precious metals, gold and silver prices tumbled sharply, leaving shoppers stunned and investors scrambling for a chance to re‑enter the market.
In the state capital, Lucknow, 24‑carat gold prices slipped by ₹3,165 per 10 grams, settling at ₹1,32,075. A short drive away, Varanasi saw a decline of ₹1,910, with the same purity now at ₹1,31,010. Meerut’s dealers quoted ₹1,32,085 for 24‑carat gold, while Delhi’s market logged a ₹1,910 drop for 24‑carat and ₹1,750 for 22‑carat gold. Meanwhile, silver, which had been on a six‑month rally, fell by roughly ₹13,000 per kilogram across these hubs.
Historical Context of Dhanteras and Precious Metals
Dhanteras, the first day of the five‑day Diwali festival, has long been a bellwether for gold demand in India. Historically, the day triggers a surge in purchases, pushing prices higher. Last year’s Dhanteras saw a modest 1.2% rise in gold, but this year the trend flipped.
The Indian Bullion Jewellers Association (IBJA) noted that the sudden dip follows a week of bullish sentiment, during which silver had surged to an intraday high of ₹1,71,275 per kilogram on October 17.
What Drove the Sudden Slide?
Analysts point to three converging factors. First, concerns over U.S. sovereign‑debt credit quality eased after President Donald Trump signaled a more conciliatory stance toward China on October 17. Second, robust earnings from regional banks lifted market sentiment, nudging bond yields higher and making non‑interest‑bearing assets like gold less attractive. Third, the U.S. Federal Reserve’s latest rate hike expectations dampened appetite for safe‑haven metals.
“When interest rates rise, gold loses its shine because investors can earn a better return elsewhere,” said financial analyst Priyanka Sharma of MoneyControl. “The same logic applies to silver, which is even more sensitive to economic cycles.”
Spotlight on the Numbers
- 24‑carat gold in Lucknow: ₹1,32,075 per 10 g (down ₹3,165)
- 24‑carat gold in Varanasi: ₹1,31,010 per 10 g (down ₹1,910)
- Silver price on MCX (10 AM IST, Oct 18): ₹1,57,300 per kg (down >₹10,000)
- International spot silver closed at $51.86 on Oct 17 (‑4.24%)
- IBJA’s Friday silver price: ₹1,69,230 per kg (‑4.75% intraday)
Reactions from Dealers and Consumers
Local jewelers in Lucknow reported a surge of foot traffic after the price cut. “Customers are ecstatic. Many came hoping to lock in a price before the festive rush,” said Ramesh Verma, owner of Verma Jewels. In Delhi, shoppers claim the dip gave them a rare “buy‑low” window during a period that usually sees the highest demand.
Conversely, some veteran investors caution against assuming the dip will last. “We’ve seen similar corrections reverse within days once macro data shifts,” warned Anand Patel, senior trader at GoldLine Commodities.
Broader Market Implications
The price reversal could ripple through related sectors, including gold‑linked ETFs and silver mining stocks. Early trading data showed a 2% dip in the NSE‑Gold ETF (GOLDBEES) following the news. Silver miners like Hindustan Zinc posted a modest 1.8% decline in share price.
Moreover, the correction may influence the upcoming Diwali sales season. Historically, robust metal prices boost consumer spending; a softer market could temper overall festive expenditure, potentially affecting retail turnover figures for October–November.
What Lies Ahead?
Market watchers will keep an eye on the next few trading sessions. If U.S. Treasury yields continue to climb, further pressure on gold and silver is likely. However, any escalation in geopolitical tension—especially around China‑U.S. trade—could reignite safe‑haven demand.
For now, analysts suggest a cautious approach: “Buy on dips, but don’t over‑commit,” advised Sharma. “Keep an eye on the macro backdrop, especially interest‑rate signals from the Fed and any fresh statements from the White House.”
Key Takeaways
- Gold and silver prices fell sharply on Dhanteras 2025 across major UP cities.
- The dip was driven by easing U.S. credit worries and rising interest‑rate expectations.
- Dealers see a surge in buying activity, branding the day a "good opportunity" for consumers.
- Potential market volatility remains as global macro factors evolve.
Frequently Asked Questions
How does the price drop affect everyday buyers during Dhanteras?
The sudden decline offers buyers a chance to purchase gold at roughly 2‑3% lower than the previous week, turning a traditionally expensive day into a more affordable one. This can boost household savings and potentially increase overall festive spending.
What caused silver to fall by over ₹10,000 per kilogram?
A combination of reduced trade‑tension fears after President Trump's remarks, higher U.S. bond yields, and profit‑taking after a six‑month rally pushed investors to sell silver, leading to the steep drop.
Will the price correction last through the rest of the Diwali season?
Experts say it’s uncertain. If global interest‑rate pressures persist, prices may stay muted. However, any fresh geopolitical shock could send the metals back up, restoring the typical Diwali price surge.
How are Indian bullion dealers responding to the sudden dip?
Dealers report a spike in foot traffic and quicker turnover of inventory, with many customers eager to lock in the lower rates before the festive rush ends.
What should investors watch for in the coming weeks?
Key indicators include U.S. Treasury yield movements, any new statements from the Federal Reserve, and further political comments that could affect China‑U.S. trade dynamics.