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Gold Prices Dip Slightly on Dhanteras Despite Record Festive Demand

Gold prices retreated from record highs on Dhanteras, falling by Rs 2,400 to Rs 1,32,400 per 10 grams for 24-karat gold, even as buyers thronged...

Oct 19
2 min read
Gold Prices Dip Slightly on Dhanteras Despite Record Festive Demand

Gold prices retreated from record highs on Dhanteras, falling by Rs 2,400 to Rs 1,32,400 per 10 grams for 24-karat gold, even as buyers thronged jewellery stores across India to kick off the Diwali festival, according to the All India Sarafa Association.

On Friday, the precious metal of 99.9% purity had surged by Rs 3,200 to touch an all-time high of Rs 1,34,800 per 10 grams. Gold of 99.5% purity also saw a pullback, dropping to Rs 1,31,800 per 10 grams from Friday’s peak of Rs 1,34,200.

Silver prices also extended losses for a second day, tumbling Rs 7,000 to Rs 1,70,000 per kilogram. Both metals have seen year-on-year gains of over 60%, reflecting a strong upward trend from last Dhanteras (October 29, 2024).

Festive Buying Drives Record Sales

Despite the price correction, consumer enthusiasm remained high. Jewellery sales saw a 15-18% increase compared to last year, driven by demand for lightweight ornaments and coins, especially among younger buyers, according to Colin Shah, MD of Kama Jewelry.

The Confederation of All India Traders (CAIT) reported that total consumer spending during Dhanteras reached around Rs 1 lakh crore, with Rs 60,000 crore attributed to gold and silver purchases, a 25% rise from last year. Delhi alone recorded bullion sales exceeding Rs 10,000 crore.

Market Drivers

Analysts say the rally was underpinned by global and domestic factors, including:

  • Weaker US dollar

  • Expectations of rate cuts by the US Federal Reserve

  • Sustained central bank accumulation

Spot gold in international markets had touched a record USD 4,379.44 per ounce on Friday before slipping 1.76% to USD 4,249.98. Spot silver also eased 4.36% to USD 51.90 per ounce after hitting USD 54.49 earlier.

N S Ramaswamy, Head of Commodities at Ventura, noted that consumers are increasingly opting for design-rich, lightweight jewellery and coins, adapting to record-high rates while continuing the traditional festive ritual of buying gold on Dhanteras for prosperity.