Gold Slumps 3.6% in Worst Week Since June; Silver Crashes Below $54 as Oil-Fuelled Rate Fears Wipe Out Festive Gains

Mumbai, Oct 24: Precious metals suffered a punishing week, with international spot gold recording its steepest weekly decline in more than four months as surging crude oil prices revived inflation fears and reinforced expectations that US interest rates would remain elevated well into 2027. Spot gold closed at $4,021.04 per ounce on Friday, 23 October, down 3.6 per cent for the week, while spot silver plunged to $53.90 per ounce, a weekly loss of approximately 6 per cent.

On the Multi Commodity Exchange (MCX), the December gold futures contract crashed ₹3,044, or 2.1 per cent, to an intraday low of ₹1,43,035 per 10 grams on Thursday, 22 October, before settling around ₹1.42 lakh per 10 grams on Friday.

MCX December silver futures plummeted ₹10,352, or 4.9 per cent, to ₹1,98,816 per kilogram on Thursday, before extending losses to close near ₹1.95 lakh per kilogram on Friday, taking the ten-session decline to over ₹32,955 per kilogram.

Spot Gold Falls from $4,175 to $4,021: A $154 Weekly Collapse Driven by Brent Above $113

The week opened on Monday, 19 October, with spot gold quoting near $4,175.60 per ounce, holding onto residual support from the prior week’s safe-haven bid. The metal briefly touched a weekly high near $4,196 per ounce in early trade before the downward momentum gathered pace. By Tuesday, 20 October, spot gold had slipped 0.43 per cent to close at $4,130 per ounce, marking a third consecutive session of losses as Brent crude climbed above $109 per barrel.

Also Read: How to Invest in Gold for Beginners: Simple Start Guide

The sell-off accelerated on Wednesday, 21 October, with spot gold closing down 0.74 per cent at $4,150.20 per ounce in a session that saw choppy two-way action, and then intensified sharply on Thursday, 22 October, when spot gold fell 2.1 per cent to $4,055.7 per ounce, its lowest level since 4 August. The metal touched a weekly low of $3,986.50 per ounce on Friday, 23 October, breaching the psychologically critical $4,000 level for the first time since July, before paring losses to settle at $4,021.04.

The $154.56 weekly decline from the prior week’s close near $4,175.60 represented the largest weekly percentage drop since June and pushed gold approximately 5.7 per cent below October’s high of ₹1,51,700 on MCX, according to analysts tracking the domestic market.

Oil at $113 and Fed Hold at 3.75%-4.00%: Why Geopolitical Risk Became a Bearish Trigger

The dominant driver of the week’s precious-metals rout was the relentless surge in crude oil prices, which climbed to approximately $113 per barrel following Houthi attacks on Saudi energy infrastructure. Higher energy costs directly feed into headline inflation, complicating the Federal Reserve’s path toward easing monetary policy. With the Federal Open Market Committee (FOMC) scheduled to meet on 27-28 October, a Reuters survey of 100 economists conducted between 16 and 20 October found that an overwhelming majority expected the central bank to hold the federal funds rate target at 3.75 per cent to 4.00 per cent, while market-implied probabilities still assigned a 76 per cent chance of a rate increase in December.

The prospect of prolonged restrictive policy raised the opportunity cost of holding non-yielding bullion, overshadowing the safe-haven demand that the Middle East conflict would ordinarily generate. The dollar index, however, remained relatively contained near 101.6, hovering near a three-week low, which provided only marginal relief to dollar-denominated gold.

The rupee snapped an eight-day rally, closing 44 paise weaker at 94.82 against the US dollar on Thursday, 22 October, as crude oil prices touched their highest levels since May, partially cushioning the fall in domestic gold prices relative to international benchmarks.

MCX Gold Settles at ₹1.42 Lakh: Daily Losses Build from ₹618 to ₹1,230 per 10 Grams

The MCX December gold futures contract, the most actively traded domestic gold instrument, opened the week under pressure, settling at ₹1,47,300 per 10 grams on Monday, 19 October, down ₹618, or 0.42 per cent, from the previous close. By Wednesday, 21 October, the contract had fallen further to ₹1,45,805 per 10 grams, down ₹714, or 0.49 per cent, as international spot gold breached $4,140 per ounce.

Also Read: How to Invest in Gold Online 

The steepest decline came on Thursday, 22 October, when the December contract crashed ₹3,044, or 2.1 per cent, to ₹1,43,035 per 10 grams during the fag-end of the evening session, before recovering marginally. On Friday, 23 October, the contract declined another ₹1,230, or 0.86 per cent, to settle at ₹1.42 lakh per 10 grams, with a turnover of 1,670 lots. The December contract is due to expire on 4 December 2026 and is distinct from the November contract, which also trades on MCX but with lower liquidity. The MCX Gold Mini contract, which has a smaller lot size, mirrored the price action but is not directly comparable on a per-10-gram basis due to contract specifications.

Open interest data for the December contract was not uniformly disclosed across sessions, but analysts noted that the sharp price decline was accompanied by long liquidation rather than fresh short-building, suggesting that the selling was driven by position unwinding ahead of the FOMC meeting rather than aggressive bearish conviction.

Silver’s Dual Identity Amplifies Losses: From $57.67 to $53.90 in a Single Week

Silver suffered a far more brutal week than gold, underscoring its higher beta to both interest-rate expectations and industrial-cycle concerns. Spot silver opened the week near $57.08 per ounce and briefly touched a weekly high of $58.15 per ounce on Wednesday, 21 October, when December futures opened at that level before quickly reversing. By Wednesday’s close, spot silver had slipped 1 per cent to $57.30 per ounce, and the decline accelerated on Thursday, 22 October, when spot silver dropped 4.6 per cent to $55.28 per ounce, its lowest level in seven months. On Friday, 23 October, spot silver fell another 1.2 per cent to $53.90 per ounce, taking the weekly decline to approximately 6 per cent and extending the ten-session crash to more than 14 per cent.

Also Read: How to Invest in Silver: 6 Best Ways (2026) 

On MCX, the December silver futures contract, which expires on 4 December 2026, opened the week near ₹2,10,400 per kilogram on Wednesday, down ₹1,085 from the prior close, and then collapsed ₹10,352, or 4.9 per cent, to ₹1,98,816 per kilogram on Thursday. On Friday, the contract fell another ₹4,191, or 2.1 per cent, to ₹1.95 lakh per kilogram, with a turnover of 5,856 lots. The intraday low on Friday touched ₹1,92,800 per kilogram, a decline of ₹6,799, or 3.40 per cent, from the previous close.

The MCX Silver Mini contract, which has a smaller lot size, trades at a similar price per kilogram but with distinct liquidity and open-interest profiles, and should not be conflated with the main December contract when assessing market depth.

Gold-Silver Ratio Widens to 73:1 from 69:1 as Silver’s Industrial Leg Buckles

The gold-silver ratio, a key gauge of relative value between the two metals, widened sharply from approximately 69:1 at the start of the week to 73:1 by Friday, 23 October, reflecting silver’s steeper decline. The ratio’s move above the 74.1 threshold, according to analysts, signals the potential for further silver underperformance relative to gold in the near term.

The divergence was driven by silver’s dual exposure: as a precious metal, it suffered from the same rate-driven repricing that hit gold; as an industrial commodity, it faced additional headwinds from weakening solar demand and concerns over the sustainability of artificial-intelligence-related capital expenditure.

Metals Focus data published on 22 October projected industrial silver demand to fall a further 3 per cent to approximately 640 million ounces in 2026, with photovoltaic demand declining by 19 per cent as manufacturers reduce silver loadings per cell.

Speculative positioning data from the Commodity Futures Trading Commission (CFTC) showed that managed-money net-long positions in silver futures had already fallen from 13,100 contracts in mid-September to 5,600 contracts as of 13 October, limiting the scope for further long liquidation but also removing a key source of upside momentum.

Mumbai 24K at ₹14,248 per Gram, Delhi at ₹14,263: City-Wise Prices Reflect Local Premiums

Retail gold prices across major Indian cities on Friday, 23 October, reflected the sharp correction in international and MCX benchmarks, with 24-karat gold in Mumbai priced at ₹14,248 per gram and 22-karat at ₹13,060 per gram, while Delhi quoted ₹14,263 and ₹13,075 respectively.

Chennai, Kolkata, Bengaluru, Hyderabad, Pune and Kerala all traded at ₹14,248 per gram for 24-karat gold, while Ahmedabad and Vadodara quoted ₹14,243 per gram, and Jaipur commanded a premium at ₹14,452 per gram for 24-karat gold, reflecting local demand conditions and dealer margins. These retail prices are inclusive of 3 per cent Goods and Services Tax (GST) and local dealer premiums but exclude making charges, which can range from 8 per cent to 25 per cent depending on the jeweller and design. For silver, the All India Bullion rate for 999 purity stood at approximately ₹2,25,000 per kilogram on 22 October, with Mumbai quoting around ₹1,95,000 to ₹2,00,000 per kilogram by Friday, down sharply from the week’s opening levels near ₹2,10,000 per kilogram.

The divergence between international and domestic silver prices was partially cushioned by the rupee’s depreciation, which made imports more expensive and prevented domestic prices from falling as much as dollar-denominated benchmarks.

Chinese Central Bank Adds 23 Tonnes in September; Indian ETFs Freeze Fresh Inflows Ahead of Dhanteras

Structural demand for gold remained supported by central-bank buying, with the People’s Bank of China adding approximately 23 tonnes in September, marking its 23rd consecutive month of purchases and the largest monthly addition in nearly three years, according to official data cited by the World Gold Council.

Global central banks collectively purchased the most gold in nearly two years in August, and the World Gold Council’s reserve data as of 6 October showed that monetary authorities now hold 36,888.97 tonnes of gold, equivalent to roughly 1.19 billion troy ounces. However, investment demand through exchange-traded funds showed signs of strain in India, with large mutual fund houses suspending fresh investments in gold and silver ETF fund-of-funds from 16 October, just ahead of the Dussehra and Diwali buying season, amid concerns that festive inflows could translate into physical gold imports and further pressure the rupee.

Despite the freeze, Indian gold ETFs had attracted net inflows of ₹45,926 crore between January and September 2026, and more than 140,000 new accounts were opened during the recent price correction, reflecting persistent retail appetite for the metal as a store of value.

Import Duty and 3% IGST Raise Domestic Supply Costs as Festive Demand Hangs in the Balance

India-specific factors added another layer of complexity to the domestic gold and silver markets. The government withdrew the 3 per cent Integrated Goods and Services Tax (IGST) exemption on gold, silver and platinum imports by banks and state-nominated agencies, with the change communicated to the GST Council on 8 October and applied retrospectively from 1 April 2026.

While banks can claim the tax back as input tax credit when supplying the metal to jewellers, the upfront cost raises working-capital requirements and tightens domestic supply ahead of the festive season. The import duty on gold and silver stands at 15 per cent, having been raised from 6 per cent in an earlier policy decision, further inflating the landed cost of bullion. Dhanteras, the single largest gold-buying occasion in the Hindu calendar, falls on 6 November this year, and jewellers are counting on festive purchases to revive volumes that have been subdued by elevated prices throughout 2026. Gold sales in October are likely to fall 11 per cent year-on-year despite the festive window, according to trade estimates, as record-high prices continue to deter price-sensitive buyers.

Monitor the 27-28 October FOMC meeting and the subsequent US Personal Consumption Expenditures inflation data as the immediate catalysts for precious-metals price direction, given the market’s 76 per cent implied probability of a December rate increase. Track Brent crude prices and the USD/INR trajectory, as crude above $110 per barrel and a rupee near 94.82 are the primary channels through which international price movements transmit to MCX and domestic retail rates. The gold-silver ratio at 73:1 warrants attention for those assessing relative value dynamics, while festive demand data around Dhanteras on 6 November will indicate whether physical buying can provide a floor to domestic prices.

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