Silver prices crashed on Friday, with October losses hitting ₹45,000 per kg on the MCX. The white metal fell to ₹1,79,600 per kg, while gold dropped to a seven-month low of ₹1,38,249. Rising US interest rate expectations and persistent inflation concerns caused many investors to move away from these precious metals.
The crash in silver prices deepened further in Friday’s trade, with the December delivery contract on the Multi Commodity Exchange (MCX) plunging another ₹10,577 per kg. The contract broke below the ₹1.80 lakh mark to hit the day’s low of ₹1,79,600 per kg.
The white metal was last seen trading around these levels in December. Friday’s losses widened its October decline to nearly ₹45,000 per kg, putting it on track for its biggest monthly fall of 2026.
Silver, which enjoyed an uninterrupted bull run in 2025, has given up more than 50% of those gains as rising crude oil prices and persistent inflation concerns reinforced expectations of US interest rate hikes.
Similarly, gold prices extended their decline for a third consecutive session in trade, falling another ₹4,347 per 10 grams to hit the day’s low of ₹1,38,249, their lowest level since late March. In October, prices have retreated by ₹10,787 per 10 grams, following a decline of ₹5,400 in September.
How much have gold and silver lost from their record peaks?
From its record high of ₹4,20,048 per kg, silver has lost 57% of its value. The sharp correction follows a 170% surge in silver prices in 2025. Gold has also witnessed a steep decline, falling ₹42,321 per 10 grams from its record peak of ₹1,80,779.
Gold is traditionally considered a hedge against inflation and a safe-haven asset during periods of geopolitical uncertainty. However, higher interest rates reduce its appeal as investors turn towards yield-bearing assets.
What is driving the sharp correction in gold and silver prices?
The US Personal Consumption Expenditures (PCE) price index increased 0.5% month-on-month in September, marking its biggest rise since March, while annual inflation accelerated to 3.6%. Core PCE inflation also climbed to 3.1% year-on-year.
Meanwhile, US GDP expanded at an annualised rate of 3.4% in the third quarter, exceeding expectations of 3.2%, supported by resilient consumer spending and strong AI-related investment.
On Wednesday, the Federal Reserve voted 10-2 to keep interest rates unchanged at 3.75%-4%, with two policymakers dissenting in favour of a 25-basis-point hike.
The US Federal Reserve and other major central banks are grappling with growing inflationary pressures as the war in the Middle East shows no signs of easing, keeping oil and gas prices elevated.
Oil prices were on track for a fourth consecutive monthly gain as an attack on a tanker in the Strait of Hormuz highlighted continuing supply risks arising from the US-Israeli war on Iran.
Higher energy prices strengthen expectations of a prolonged period of elevated interest rates, making non-yielding assets less attractive for safe-haven buyers.
Traders are now pricing in about a 75% chance of a rate hike in December, according to the CME FedWatch Tool. Elsewhere, annual core inflation in Japan's capital rose well above the central bank's 2% target in October, data showed on Friday, highlighting mounting price pressures.