Diwali 2025: Gold & silver likely to consolidate next week; Here’s what analysts said
After a record-breaking surge in both domestic and global markets, gold and silver prices are likely to see some consolidation and mild correction next week as festive demand tapers off and profit-booking sets in, analysts said.“Gold prices are likely to see some corrections/ consolidation as ongoing fundamentals are already priced in and physical demand wanes post mid-week,” Pranav Mer, Vice President, EBG – Commodity & Currency Research, JM Financial Services Ltd told PTI.He added that traders will closely track key global cues such as Chinese data, UK inflation, PMI releases, US consumer confidence, and remarks from Federal Reserve officials ahead of the October 28–29 Fed policy meeting.Gold ended last week higher, supported by festive buying in India and strong inflows into exchange-traded funds (ETFs). However, Mer noted that a “sharp corrective move was seen on Friday amid profit-booking as the rally looks overstretched now.”On the Multi Commodity Exchange (MCX), gold futures rose Rs 5,644 or 4.65% last week, with December contracts hitting a record Rs 1,32,294 per 10 grams on Friday before settling at Rs 1,27,008, snapping a five-day record streak.According to Prathamesh Mallya, DVP – Research, Non-Agri Commodities and Currencies, Angel One, “The shine in gold prices just does not stop as momentum has been on the rising side throughout 2025, supported by policy uncertainty, US tariffs, and a slowdown in the American economy.”Echoing similar sentiment, Karthick Jongadla, Investment Manager on smallcase and Founder of Quantace Research, said the rally was fueled by a softer dollar, easing bond yields, and safe-haven demand amid “lingering US-China trade noise and a US data/shutdown fog.”“Gold jumped to a new record this week. The MCX gold futures printed an intraday high of Rs 1,32,294 per 10 grams on October 17 and stayed firm into Dhanteras,” Jongadla said, adding that India’s gold reserves with the RBI have now crossed $100 billion, reflecting robust institutional interest.On the global front, Comex gold futures for December delivery hit a record $4,392 per ounce on Friday before settling at $4,213.30, down 2.12%.“Gold extended its meteoric rally to fresh record highs this week as investors rushed into safe-haven assets amid renewed fears about cracks in the US financial system after two regional banks disclosed loan irregularities linked to potential fraud,”said Riya Singh, Research Analyst – Commodities and Currency, Emkay Global Financial Services.Silver too mirrored gold’s movement. MCX silver futures for December delivery hit a record Rs 1,70,415 per kilogram before closing at Rs 1,56,604, posting a weekly gain of Rs 10,138 or 6.92%.“Silver prices extended their bull run along with gold and were up over 15% in the week till Thursday, supported by reports of a supply crunch in the physical market and sustained ETF buying,” Mer of JM Financial said.“However, prices pared more than half the gains in a sharp sell-off on Friday which triggered profit-booking by investors. The rally in both bullions looks over-stretched and may see more correction ahead.”Globally, Comex silver futures hit $53.76 per ounce before retreating to $50.10, down 6% on Friday.“Silver prices touched record highs on Friday before retracing slightly, marking a remarkable run of nearly 87% for 2025,”Singh of Emkay Global noted. She added that ETF holdings have expanded by 117 million ounces this year to 833 million ounces, though accumulation appears to be plateauing.She also pointed out tight supply conditions in London, where more than 15 million ounces were withdrawn from Comex warehouses in New York last week to ease local shortages, even as ETF inflows of 11 million ounces further tightened supply.Analysts expect volatility to persist next week but maintain that the broader trend for precious metals remains positive, underpinned by macroeconomic uncertainty, central bank buying, and strong investor appetite for safe-haven assets.(Disclaimer: Recommendations and views on the stock market and other asset classes given by experts are their own. These opinions do not represent the views of The Times of India)
