- Silver prices in India fell 11.8% in October, while gold dropped 4.2% over the same period
- Rising oil costs and US inflation have prompted the Federal Reserve to signal possible rate hikes
- Higher interest rates hurt gold and silver as they do not generate income for holders
Dhanteras falls on Friday, Nov. 6, and Indian households will once again head out to buy gold and silver. This year, the two metals are telling very different stories. Silver has more than halved in dollar terms since its January record. In India, it slipped below Rs 2 lakh a kilogram last week.
Gold has fallen too, but far less. Here's a look at the reasons why.
The Numbers
Silver 999 closed at Rs 1,94,479 a kilogram on Monday, Oct. 26, according to the closing rates of the India Bullion and Jewellers Association (IBJA). That is 11.8% below its Sept. 30 close of Rs 2,20,435.
Gold 999 fell 4.2% over the same stretch, to Rs 1,41,710 per 10 grams from Rs 1,47,888. Put simply, silver has lost nearly three times as much as gold this month.
| IBJA closing rate | Sept 30 | Oct 26 | Change |
|---|---|---|---|
| Silver 999 (₹/kg) | 2,20,435 | 1,94,479 | -11.8% |
| Gold 999 (₹/10 g) | 1,47,888 | 1,41,710 | -4.2% |
Source: India Bullion and Jewellers Association (IBJA), daily closing (PM) rates
The gap has been widest on the bad days. On Oct. 22, silver dropped 3.4% while gold slipped about 1%, and silver closed below Rs 2 lakh a kilogram for the first time this year. The next day, silver fell another 2.7% against gold's 0.75%.
Why Both Metals Are Falling
The chain starts with oil. Brent crude was near $115 a barrel on Tuesday, roughly 80% higher than a year ago. Costlier fuel is pushing up prices in the world's largest economy.
US consumer inflation rose to 3.7% in September from 3.4% in August, the Bureau of Labor Statistics said on Oct. 14. Gasoline prices jumped 9.1% in the month and accounted for more than half of the increase.
That has turned the US Federal Reserve hawkish. On Sept.16, the Fed raised its policy rate by a quarter point to 3.75–4%, saying inflation remained elevated. Its next decision comes at the end of a two-day meeting on Oct. 27–28, according to the Fed's calendar.
After the inflation data, CME Group's FedWatch tool put the odds of a hike at this week's meeting at 53.7%, up from about 22% before the release. Silver futures fell 5.2% that morning, against a 1.6% drop in gold futures.
Higher rates hurt both metals because neither pays interest. When safe US government bonds pay more, holding bullion costs more in lost income. The 10-year US Treasury yield stood at 5% on Monday, per US Treasury data. A firm dollar adds to the pressure, since it makes dollar-priced metals dearer for everyone else.
ALSO READ: Silver Is Now Down From Rs 4.2 Lakh To Rs 1.9 Lakh: Where It Goes From Here
Why Silver Is Falling Harder
Gold and silver face the same rate headwind, but three things make silver take the bigger hit.
Silver is half an industrial metal
Industry used 657.4 million ounces of silver in 2025, nearly three-fifths of total demand of 1.13 billion ounces, according to the Silver Institute's World Silver Survey 2026. Gold's value rests mostly on its role as money and a store of wealth. So when high rates threaten factory demand, silver suffers twice: as a precious metal and as an industrial input.
Its biggest new market is cutting back
Solar panel makers have been using less silver per panel to manage costs, a process the industry calls thrifting. The Silver Institute expects industrial demand to fall 3% this year, chiefly because of slower uptake from the solar sector.
It rose faster, so it is falling faster
Silver is a smaller, more volatile market than gold. It hit a record above $121 an ounce on Jan. 29, the Silver Institute said. It now trades near $54, a fall of about 56% from the peak. Gold, at about $4,025, is roughly 28% below its record of $5,608.
Gold also has a backstop that silver lacks, as central banks hold the yellow metal in their reserves, which gives it a steady buyer in a sell-off. No such buyer exists for silver.
The widening gap shows up in the gold-silver ratio, which measures how much silver it takes to buy the same weight of gold. On IBJA rates, it rose from 67.1 on Sept. 30 to 72.9 on Oct. 26. A higher ratio means silver has become cheaper relative to gold.
The Gap, In One Chart
What It Means For Dhanteras Buyers
The first big test comes before the festival. The Fed announces its decision at 2 pm US Eastern time on Wednesday, which is 11:30 pm in India. A hike, or hints of more to come, would likely hit silver harder than gold again. A pause with softer language could bring relief.
The next US inflation reading lands on Nov. 10, four days after Dhanteras, according to the BLS. Oil prices will shape that number, so crude remains the indicator to watch through the festive week.
For shoppers, the trade-off is simple. Silver is far cheaper than it was in January, so a fixed festive budget buys more of it. But it is also the more volatile metal, and nothing in the current data says the fall has ended.
Buyers purchasing silver for tradition, such as coins or utensils, may care less about the next few weeks of price moves. Those buying it as an investment face a different question: whether they can hold through further swings in either direction. Spreading purchases over several weeks, rather than buying everything on one day, is one way some buyers manage that risk.
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