New Delhi, Aug 20, 2025: Prices of precious metals fell sharply in the national capital on Wednesday, reflecting weakness in the international markets and the strengthening of the US dollar. According to the All India Sarafa Association, gold slipped by ₹400 to ₹1,00,020 per 10 grams. Silver, too, witnessed a heavy correction, tumbling by ₹1,500 to ₹1,12,500 per kilogram.
Gold of 99.5% purity followed a similar path, sliding ₹350 to ₹99,700 per 10 grams, compared to the previous day’s closing price of ₹1,00,050.
Why Are Prices Falling?
Analysts pointed to two main triggers for the sudden dip:
- A Stronger US Dollar:
The dollar index climbed to a one-week high, making dollar-denominated commodities like gold and silver more expensive for buyers in other currencies. When the dollar strengthens, global demand for precious metals usually softens, dragging prices lower. - Easing Geopolitical Tensions:
Investors around the world often rush to gold and silver during periods of political or economic uncertainty. However, optimism following recent discussions among US President Donald Trump, Russian President Vladimir Putin, Ukrainian President Volodymyr Zelenskyy, and European leaders has lowered the demand for safe-haven assets. This reduction in perceived risk has contributed to the decline in both gold and silver.
Global Market Snapshot
In the international market, the downward trend was also visible.
- Spot gold was trading at US$3,326.04 per ounce, showing nearly a 1% drop.
- Spot silver stood at US$37.07 per ounce, also down by about 1%.
These global cues had a direct impact on domestic bullion prices in India, particularly in large trading hubs like Delhi.
What Investors Are Watching
The focus now shifts to the Jackson Hole Economic Symposium, one of the most closely watched events in the financial calendar. Scheduled later this week, the symposium will feature a speech by Federal Reserve Chair Jerome Powell, whose comments could provide clearer signals on the direction of US monetary policy.
Additionally, the minutes from the Federal Reserve’s recent policy meeting are due to be released soon. These minutes will reveal the central bank’s thinking on inflation, growth, and interest rates — all of which directly influence gold and silver prices. If the Fed hints at maintaining or even raising interest rates, it could further weigh on precious metals, as higher yields typically reduce the appeal of non-interest-bearing assets like gold.
Broader Implications
For Indian consumers, the latest correction could bring temporary relief, especially for buyers preparing for the festive season, when demand for gold traditionally spikes. However, experts caution that prices may remain volatile in the short term, influenced by currency movements, global investor sentiment, and upcoming economic data from the US and Europe.
Market watchers believe that unless there is a significant geopolitical flare-up or a dovish surprise from the Federal Reserve, precious metals may continue to face pressure in the near term. Still, long-term demand in India, driven by cultural and investment needs, is expected to provide a cushion against steep declines.
