When Renisha Chainani, Research Head at Augmont Research told The Economic Times that gold on the Multi Commodity Exchange (MCX) had vaulted past Rs 1,18,000 per 10 grams, the market was buzzing. Silver wasn’t far behind, trading above Rs 1,44,000 per kilogram – a 52 % jump year‑to‑date. With Diwali just weeks away, investors are scrambling to decide whether this rally will keep climbing or snap back. The sheer speed of the rise, over 47 % for gold alone, feels like a fireworks show that’s just started.
Festival Demand Fuels the Fireworks
The cultural pull of Diwali is no secret: gold and silver are traditional gifts, symbols of prosperity, and the buying frenzy usually peaks on Dhanteras 2025India. On 19 October, sales volumes matched the previous year, and overall value rose more than 25 %. Even after a sharp correction of Rs 3,000 in gold and Rs 7,000 in silver, the market rebounded quickly – a testament to the deep‑seated belief that buying precious metal during the festive window brings luck.
Analyst Forecasts: Bullish vs. Conservative
Chainani’s outlook is unmistakably bullish. She says, “Gold could hit $3,950‑$4,000 an ounce by 21 October, which translates to roughly Rs 1,20,000‑Rs 1,22,000 per 10 grams on MCX. Silver might touch $49‑$50 an ounce, or about Rs 1,48,000‑Rs 1,50,000 per kilogram, if geopolitical tensions rise.” Those numbers sit at the high end of the spectrum.
On the other side of the aisle, Bajaj Finserv paints a more cautious picture, projecting Diwali gold rates between ₹82,000‑₹85,000 per 10 grams. Their methodology leans on five years of historical Diwali trends (2019‑2024) and assumes a modest post‑festive correction.
- Augmont Research – Gold up to Rs 1,22,000, Silver up to Rs 1,50,000.
- Bajaj Finserv – Gold limited to ₹85,000, Silver not explicitly forecast.
Both camps agree that the direction of global policy – especially U.S. Federal Reserve rate cuts – will be decisive. The rest of this piece unpacks why.
Why the Metals Are Soaring
Three forces are at play. First, the Federal Reserve has signalled more rate cuts, keeping real yields low and making non‑yielding assets like gold attractive. Second, geopolitical jitters – from lingering trade disputes to regional conflicts – have investors seeking safe‑haven stores of value. Third, exchange‑traded funds (ETFs) that track precious metals have poured record inflows; in the past six months, gold‑linked ETFs added over $12 billion, a figure that dwarfs last year’s total.
Adding another layer, the Indian rupee has slipped against the dollar by about 3 % since January, meaning every dollar‑priced ounce of gold costs a few thousand rupees more for domestic buyers. That currency pressure amplifies the price surge on MCX.
Retail Players Jump In
Seeing the momentum, Malabar Gold & Diamonds, headquartered in Kerala but operating globally, rolled out special Diwali offers on its jewellery line. The campaign highlights “buy now, celebrate later,” betting that even a post‑festival dip won’t dent sales.
The same day, GoldPriceIndia.com released a historic price chart comparing Diwali rates from 2000‑2024, underscoring how 2025’s numbers dwarf previous peaks. Meanwhile, The Economic Times reported a modest fall in both metals after Dhanteras, confirming the classic correction pattern that follows the festive surge.
What Comes After the Festivities?
Most experts expect a stabilization phase. Vikram Patel, senior analyst at ICICI Securities notes, “Historically, gold eases off by 5‑7 % within two weeks after Diwali, unless an external shock reignites demand.” He adds that any further Fed easing or a spike in oil prices could reignite the upward trend.
In short, the post‑Diwali window will be a litmus test for whether the 2025 rally was a fleeting festival high or the start of a longer‑term bull market for India’s precious‑metal lovers.
Key Takeaways
- Gold on MCX has broken Rs 1,18,000 per 10 grams, a 47 % YTD gain.
- Silver sits above Rs 1,44,000 per kilogram, up 52 % YTD.
- Augmont Research forecasts gold up to Rs 1,22,000 by Diwali; Bajaj Finserv sees a ceiling around ₹85,000.
- Drivers include Fed policy, geopolitical risk, rupee weakness, and record ETF inflows.
- Retailers like Malabar Gold & Diamonds are leveraging the hype with special offers.
- Post‑Diwali, prices are likely to steady, with a possible 5‑7 % dip, unless global shocks intervene.
Frequently Asked Questions
How will the projected gold price affect Indian households?
If gold reaches the Rs 1,22,000 per 10 grams range, household purchasing power could be squeezed, especially for middle‑class families who view gold as a savings tool. Higher prices may push buyers toward smaller ornaments or alternative investments like sovereign gold bonds.
What’s driving the silver price surge alongside gold?
Silver benefits from the same safe‑haven demand as gold, but it also sees industrial interest as the green‑energy sector expands. With solar panel production and electric‑vehicle batteries requiring more silver, the metal enjoys a dual‑boost from both investors and industry.
Why do Augmont Research and Bajaj Finserv have such different forecasts?
Augmont leans heavily on recent global macro trends – aggressive Fed easing and heightened geopolitical risk – while Bajaj bases its model on historic Diwali price patterns and assumes a quicker post‑festival correction. The divergence reflects differing weight given to external versus seasonal factors.
Will the rupee’s depreciation continue to push gold prices higher?
A weaker rupee makes each dollar‑priced ounce cost more in local currency, so short‑term pressure on gold will stay upward. However, if the RBI intervenes or the dollar steadies, the impact could moderate.
What should investors watch after Diwali to gauge the next move?
Key signals include any surprise Fed statement, oil price spikes, and the pace of ETF inflows. A sudden uptick in ETF purchases or a new geopolitical flare‑up could reignite the rally, while a stable monetary environment would likely see prices settle.