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Why did gold and silver prices drop after Diwali? Key reasons

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By Vani Dua

3 min read | Updated on November 03, 2025, 15:56 IST

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SUMMARY

In line with market expectations, the US Fed cut interest rates by 25 basis points on Wednesday, October 29. However, the Fed also said that the hopes for another 25 bps cut in December are premature, giving a slight push to the precious metals. 

gold, gold price, gold prices drop after Diwali

As the US and China moved closer to finalising a trade deal, gold and silver prices declined. 

Gold and silver’s unprecedented bull run in 2025 made waves in the Indian markets. In October, gold prices in Delhi touched an all-time high of nearly ₹1.35 lakh per 10 gram, and silver hovered near the ₹1.9 lakh per kg mark. 

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The precious metals started falling after Diwali, declining by over ₹14,000 per 10 gram in domestic markets to around ₹1.21 lakh per 10 gram. Silver, too, registered a steep fall, touching ₹1.45 lakh per kg, declining by nearly ₹45,000 per kg. 

Gold and silver futures also fell significantly after Diwali. From the peak of ₹1.32 lakh per 10 gram, gold futures declined by around ₹13,000 per 10 gram from the peak near October-end, and silver futures declined by nearly ₹23,000 per kg from the peak of ₹1.70 per kg on the Multi Commodity Exchange. 

While the prices of the yellow and white metals have risen moderately in the last two sessions, they’re trading well below their lifetime highs. 

Gold prices in Delhi on Friday closed at around ₹1.25 lakh per 10 gram, and silver closed at nearly ₹1.53 lakh per kg. Gold futures on Monday, November 3, were trading at around ₹1.22 lakh per 10 gram, and silver contracts were hovering around ₹1.49 lakh per kg. 

What caused the drop in prices after Diwali?

Geopolitical tensions: Gold prices jump during geopolitical tensions, as it's a safe-haven metal. As the US and China moved closer to finalising a trade deal, gold and silver prices declined. 

US President Donald Trump, on Thursday, October 30, said that the United States and China have reached a trade deal following his meeting with Chinese President Xi Jinping. 

US Fed meeting: The yellow metal tends to thrive in uncertain environments. As investors were expecting a positive outcome from the US Federal Reserve’s meeting, gold and silver prices eased. 

In line with market expectations, the US Fed cut interest rates by 25 basis points on Wednesday, October 29. However, the Fed also said that the hopes for another 25 bps cut in December are premature, giving a slight push to the precious metals. 

Profit booking: During Diwali, demand for gold and silver rises in India due to auspicious buying. These precious metals have a significant traditional and cultural value in the country. These metals typically rise during the festive season. After the festive season, traders and investors often book profits, which causes a temporary correction in prices. 
US Dollar: A strong US dollar usually leads to lower demand for gold globally. After the US Fed cut interest rates and positive US economic data emerged, the dollar index strengthened. This put additional downward pressure on bullion.
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About The Author

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Vani Dua is a journalism graduate from LSR College, Delhi. At Upstox, she writes on personal finance, commodities, business and markets. She is an avid reader and loves to spend her time weaving stories in her head.

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