Gold, silver rates crash today: What's behind plunging precious metals prices ahead of Dhanteras, Diwali 2026? Details

Gold and silver prices declined during the trading session on Tuesday, November 3, ahead of Dhanteras and Diwali. According to the India Bullion and Jewellers Association (IBJA), 999-purity gold fell ₹542 per 10 grams between the morning and evening sessions to ₹1,37,576. Silver prices also declined ₹875 per kg to ₹1,76,425.

However, the comparison with the previous evening presents a different picture. Gold was marginally higher, while silver continued to decline sharply, indicating that the correction has been more pronounced in silver.

The price movement comes at a crucial time for Indian households, with Dhanteras falling on November 6 and Diwali on November 8. Gold and silver purchases traditionally increase during the festive period, but the recent volatility has raised questions about whether buyers should take advantage of lower prices or wait for further declines.

Why are gold and silver prices falling?

The correction in international bullion markets has been driven by concerns around US interest rates, geopolitical developments involving Iran, inflation and investor profit booking.

1. US Federal Reserve's hawkish stance weighs on gold

One of the biggest factors influencing gold prices is the changing outlook for US interest rates. Markets are increasingly factoring in the possibility of another Federal Reserve rate hike in December, keeping investors cautious about non-yielding assets such as gold.

Higher interest rates generally reduce gold's appeal because the metal does not generate interest income. Investors may prefer interest-bearing assets such as government bonds when yields are attractive.

Satish Dondapati, Fund Manager at Kotak Mahindra AMC, said gold prices have corrected nearly 3% in US dollar terms over the past week, touching their lowest level in almost a year.

"While softer US bond yields and a weaker dollar should support gold prices, the Fed's hawkish stance and expectations of interest rates staying higher for longer have kept prices under pressure," he said.

He added that despite geopolitical tensions and inflation risks, gold has struggled to attract buying interest because markets remain focused on the Federal Reserve's interest-rate outlook.

2. Iran conflict and crude oil prices add to inflation concerns

Developments in the Iran conflict have added another layer of uncertainty to precious metal prices.

The conflict has disrupted global energy markets, keeping crude oil prices elevated and raising concerns about inflation. Higher energy prices can make it difficult for central banks to bring inflation under control, potentially delaying interest-rate cuts or prompting further monetary tightening.

This creates a challenging environment for gold. Although geopolitical uncertainty traditionally supports safe-haven demand, rising inflation and interest-rate expectations can offset that support.

Manav Modi, Commodities Analyst at Motilal Oswal Financial Services, said easing crude oil prices had supported a nearly 2% recovery in gold during the previous session.

Brent crude declined amid renewed diplomatic efforts between the US and Iran. However, uncertainty around negotiations and subsequent developments have kept energy markets volatile.

Modi said markets continue to price in around a 75% probability of another Federal Reserve rate hike in December, keeping the broader monetary environment challenging for bullion.

3. Profit booking and leveraged selling amplify the correction

Another factor contributing to the fall is profit booking after the sharp rally in precious metals earlier this year.

Investors who had accumulated gold and silver at lower levels have been booking profits amid changing expectations around US monetary policy.

Modi also pointed to margin-related liquidation following an AI-led equity market selloff. When investors face losses in other asset classes, they may sell profitable positions in commodities such as gold to meet margin requirements or raise liquidity.

Such selling can intensify price movements, particularly in silver, which typically experiences greater volatility than gold.

4. Silver faces additional pressure from industrial demand concerns

Silver's dual role as a precious metal and an industrial commodity makes its price movements different from those of gold. Apart from investment demand, silver prices are influenced by industrial consumption across sectors such as solar energy, electronics and manufacturing.

Concerns about global economic growth and industrial demand can therefore weigh more heavily on silver. Its relatively higher volatility also means that investor selling can result in sharper price corrections.

What is the outlook for gold and silver prices?

The near-term outlook for precious metals remains uncertain, with movements likely to depend on US monetary policy, crude oil prices and geopolitical developments.

Dondapati said the recent correction does not change the long-term investment case for gold, particularly because high interest rates may not be sustainable over an extended period.

"Gold may remain under pressure in the near term, with further volatility possible. Investors should avoid investing the entire amount at current levels and instead consider staggered buying on declines," he said.

He added that gold could continue to form part of a long-term portfolio as a hedge against uncertainty and for diversification.

Modi, meanwhile, said bargain hunting had provided some support to precious metals after the recent correction. Chinese household buying has also picked up at lower price levels, offering some support to physical demand.

He added that investors would also monitor the US midterm elections, as potential changes in congressional control could influence fiscal policy, government borrowing and longer-term demand for safe-haven assets.

Should you buy gold and silver ahead of Dhanteras?

For households planning festive purchases, the correction could offer an opportunity to buy gold and silver at relatively lower levels than their recent highs. However, buyers should remember that domestic benchmark rates and the final jewellery bill are different.

Dondapati recommends avoiding deploying the entire investment amount at once and instead considering staggered purchases during price declines.

For long-term portfolios, gold can continue to serve as a diversification instrument and a hedge against uncertainty. Silver, given its greater price volatility and industrial demand exposure, requires a separate assessment of risk and investment horizon.