Buying gold jewellery has increasingly become a distant dream. What was once a routine purchase for weddings or future savings has now turned into a major financial burden. Amid record-breaking prices, experts have issued a significant update, warning that prices could fall as sharply as they have risen, with a possible drop of 10% to 20% in a single day.
Throughout this year, both gold and silver have repeatedly touched new highs. In the international market, gold prices have climbed to around $4,500 per ounce. In India, gold is trading at an all-time high of nearly Rs 1.40 lakh. Silver has also seen an extraordinary surge, with domestic prices crossing Rs 2.50 lakh per kilogram, marking a historic peak. The rise is attributed to several factors, including geopolitical tensions, a weak dollar, and expectations of further monetary policy easing.
Market experts caution that such steep rises are often followed by sharp corrections. They predict that silver prices could fall by 10% to 12% in a single day, while gold may also witness a sudden and significant decline. Although there are currently fewer sellers in the market, large long positions remain open on exchanges. Experts warn that if profit booking begins, the market could face a severe shock.
With prices at these levels, many are questioning who is actually buying gold and silver. Analysts say demand for jewellery and everyday use has fallen sharply. Reports of gold and silver being sold at discounts in major markets such as Dubai and India support this view, indicating weak consumer demand as prices continue to rise.
According to market sources, the current rally is being driven mainly by investments. Gold ETFs, silver ETFs, long-term investments, and large fund inflows are keeping prices elevated. With bank fixed deposits offering returns of around 7%, many investors have shifted their money towards gold and silver in search of higher returns. However, experts warn that a one-sided rush into any asset class can be risky.
The surge in prices has also hit the jewellery industry hard. Sales, which usually rise during the wedding and festive seasons, have slowed considerably. Jewellers are facing pressure on working capital as the value of their inventory increases. Consumers who once comfortably bought 22-carat gold are now opting for lighter jewellery made from 18 or even 14-carat gold.
Silver has become even more unaffordable for ordinary buyers, making it difficult for them to purchase in large quantities. As a result, many experts believe significant price corrections could occur in the coming days. Gold prices could fall by Rs 10,000 to Rs 15,000, while silver may drop by 10% to 20%.
Experts advise those planning to buy gold or silver jewellery to wait a little longer, as purchasing after a correction could be more beneficial. Even for investors, they recommend reducing risk by investing in stages rather than putting in the entire amount at once.