Gold, Silver Prices Ahead Of Diwali: Buy Now Or Wait For A Further Dip?

For Indian households, buying gold or silver around Diwali and Dhanteras is often more than a financial decision. It is a tradition passed down through generations, a way to mark an auspicious occasion, and, for many families, a means of preserving wealth.

But this year, the ritual comes with a question that is harder to ignore: after the sharp correction in precious metal prices, is it a good time to buy, or could prices fall further?

The recent market movement has offered no simple answer. Gold and silver prices declined after a strong rally, giving buyers some relief, only to rebound sharply in the run-up to Dhanteras. In New Delhi, gold of 99.9 per cent purity rose by Rs 4,800 to Rs 1,46,600 per 10 grams on Wednesday, November 4, while silver jumped Rs 9,000 to Rs 1.93 lakh per kg, according to the All India Sarafa Association.

For someone planning to buy jewellery, coins or a small quantity of precious metal as part of the festive ritual, the choice may be straightforward.

For those considering a sizeable investment, however, the recent swings raise a different set of questions: what is the purchase meant to achieve, how long can the money remain invested, and is the decision being driven by financial goals or the fear of missing out?

A Price Correction Does Not Automatically Make Gold Or Silver A Buy

The recent decline in precious metal prices has drawn buyers’ attention, but experts caution that a lower price, by itself, does not necessarily make an investment attractive.

Prasenjit Paul, fund manager at 129 Wealth and research analyst at Paul Asset, said gold and silver were still coming off a substantial rally. He expects the metals could correct further or move sideways in the near term, and does not recommend a large fresh investment at current levels.

For households with an actual near-term need, such as a wedding or a gift, Paul said gradual buying during meaningful declines could be considered.

His view is more cautious than that of Souvik Biswas, head of research at BajajCapital Ltd, who said gold did not face strong negative pressure under current conditions. Biswas put a fair value range for gold at Rs 1.45 lakh to Rs 1.50 lakh per 10 grams in rupee terms, with the possibility of it moving towards Rs 1.55 lakh.

Biswas attributed the recent price dislocation to high global yields, particularly in the US, persistent inflationary pressures linked to oil, geopolitics and weather, as well as uncertainty around the AI trade. He also said the possibility of lower geopolitical escalation and greater institutional uncertainty in the US could prove supportive for gold.

However, he cautioned that investors should not expect the metal to repeat its exceptionally strong performance in 2025.

The contrasting outlooks underline why festive buyers may want to distinguish between a purchase they have planned for a specific occasion and an investment decision based on expectations of future price movements.

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Buying For Dhanteras? The Financial Purpose Matters More Than The Price

For many families, the question is not whether to buy gold, but how much to buy.

Mukesh Pandey, founder and managing director of Rupyapaisa.com, said the correction could offer an opportunity for consumers planning to purchase jewellery for Diwali or weddings, provided they remain within their financial limits.

But those buying precious metals purely as an investment should avoid making bulk purchases just because prices have temporarily declined, he said.

Rohit Mahajan, founder and CEO of plutos ONE, also sees the correction as an opportunity for informed buying rather than a reason to rush. He noted that gold and silver in India are tied not only to investment demand but also to tradition, wealth preservation and festive sentiment.

For readers, the distinction is practical. A family purchasing jewellery for an upcoming wedding has a different need from someone planning to invest a large sum in bullion. A customary Dhanteras purchase, meanwhile, may be a small part of the household’s festive spending rather than an attempt to earn returns.

“Tradition” should not be conflated with “Investing”, Biswas said, adding that individuals could still pay heed to tradition as he did not see strong negative pressure on gold.

Gold And Silver Do Not Play The Same Role In A Portfolio

The choice between the two metals also depends on what a buyer expects from the purchase.

Gold has traditionally been viewed as a long-term wealth-preservation asset. Silver, on the other hand, is influenced by investment demand as well as industrial consumption, and typically sees greater price fluctuations.

Pandey said a staggered buying strategy could help investors navigate price volatility. Mahajan similarly advised buyers with an investment objective to spread purchases over time rather than commit the entire amount at once.

Paul said buyers should first establish whether they are purchasing for investment, jewellery or gifting. They should then consider their portfolio allocation, intended holding period, purity, making charges, taxes and the buy-sell spread.

He also advised against leverage, lump-sum purchases and chasing prices solely because of the festive season.

For jewellery buyers, the cost of the finished product is also distinct from the market price of the metal. The purchase should therefore be assessed in the context of its intended use and the buyer’s budget, rather than solely on whether gold or silver has become cheaper.

Price Correction Lifts Festive Buying, But Consumers Are Choosing Carefully

The recent easing in prices has improved sentiment among jewellers, although the industry expects buyers to remain selective.

Rajesh Rokde, chairman of the All India Gem and Jewellery Domestic Council, told PTI that lower gold prices were encouraging demand for lightweight jewellery and smaller-ticket purchases. He expects sales volumes to remain broadly flat year-on-year, while sales value could rise by 20-30 per cent.

Dhanteras falls on November 6 this year, at the beginning of the month, which Rokde said could also encourage purchases as consumers are likely to have their salaries in hand.

The industry is seeing interest in lightweight designs, silver jewellery and coins. High inflation, geopolitical tensions and the drought-like situation in Maharashtra, however, could weigh on consumer sentiment.

The World Gold Council’s regional CEO for India, Sachin Jain, said the correction could prompt consumers with weddings planned over the next three to six months to advance their purchases. He expects demand across categories, from premium jewellery to investment-oriented products such as coins and bars.

Avinash Gupta, vice-chairman of the GJC, said demand could remain steady in volume terms, while growing in value. He also pointed to a shift towards lightweight jewellery and 18-karat gold for wedding purchases.

Silver is also drawing interest from younger consumers, with its relative affordability and variety of jewellery designs making it a complementary festive purchase.

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Should Tradition Take Precedence Over Market Signals?

A Dhanteras purchase does not have to be treated as a market call. But neither does the occasion need to dictate how much a household spends.

Paul said traditional buying could support demand and prices in the short term, particularly after a correction. However, festive demand alone would not change the medium-term commodity cycle. He advised investors to separate a customary purchase from a large investment decision.

For households buying jewellery or gifting precious metals, the immediate priority is to ensure the purchase fits their financial limits. For those investing, the focus should be on the role of the asset in their portfolio, the time they can remain invested and their ability to withstand further price fluctuations.

The more useful question this Diwali may not be whether gold or silver is at the perfect price. It is whether the purchase is being made for a reason that will still make sense after the festive lights have gone out.