Gold and Silver Plunge: Silver Falls Over ₹1 Lakh, Gold Below ₹1.50 Lakh — Should You Buy Now?

As feared, gold and silver prices saw a dramatic reversal on Friday, bringing an abrupt halt to the recent bull run. On the Multi Commodity Exchange (MCX), silver plunged by over ₹1,07,971 per kilogram (27%) to close at ₹2,91,922, while gold dropped ₹20,328 per 10 grams (12%) to settle at ₹1,49,075. Both metals had reached all-time highs just a day before — silver at ₹4,20,048 per kg and gold at ₹1,80,779 per 10 grams.

Biggest One-Day Fall in 15 Years

This sharp correction marks the largest single-day fall in silver prices in 15 years, pulling it below ₹3 lakh after hitting a record of ₹4 lakh. Gold, which had surged from ₹1 lakh to ₹4 lakh over 14 months, also reversed sharply, losing over ₹20,000 in a single day.

Gold Investment Trends

Despite the correction, gold remained a preferred investment choice in 2025. Total gold demand declined 11% to 710.9 tons, but investment demand rose 26% to 96 tons, reaching a record ₹2.97 lakh crore, a 73% increase from the previous year. This reflects investors’ continued preference for gold over other asset classes.

Why Did Prices Fall?

The sudden drop in bullion prices was triggered by a strong U.S. dollar. Following the appointment of Kevin Warsh as the new U.S. Federal Reserve Chair by President Donald Trump, the dollar index surged past 97 — its largest single-day gain since May 2023. A stronger dollar makes gold and silver more expensive for international buyers, reducing demand. Rising interest rates further diminish the appeal of non-yielding assets like gold and silver.

Is This the Right Time to Buy?

Market experts suggest a mixed outlook:

• Silver: Strategic and industrial demand may support silver in the long term. Supply constraints and geopolitical tensions could fuel further gains. However, historical volatility and recent sharp declines indicate short-term risk remains high. Technical indicators show the market is currently overbought, pointing to potential further corrections.
• Gold: Geopolitical tensions, such as rising U.S.–Iran conflict risks, may drive safe-haven demand, offering opportunities for long-term investors despite short-term volatility.

Investors should weigh these factors carefully. While the current dip provides a potential entry point, short-term fluctuations are likely to continue, making cautious, well-timed buying advisable.