Will Gold and Silver Maintain Their Appeal This Diwali Despite Soaring Prices?
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Synopsis
As India approaches Diwali, gold and silver are expected to maintain strong demand despite record prices. This report delves into the cultural significance of gold and the industrial potential of silver, revealing how consumer habits are evolving in response to market changes.
Key Takeaways
- Gold demand in India remains strong despite record prices.
- Silver's industrial demand may push prices over $50 per ounce.
- Consumers are adapting by favoring lighter, lower-carat gold options.
- The shift towards digital gold and sovereign bonds is gaining traction.
- Gold's stability is reaffirmed amid economic uncertainties.
New Delhi, Oct 16 (NationPress) Even with gold hitting historical highs, the cultural significance of gold will ensure its ongoing demand in India. Additionally, silver’s role as a key industrial material may push its price to exceed $50 per ounce, according to a report released on Thursday.
"While we do not expect gold to replicate its remarkable performance from YTD 2025, its upward trend is clearly not finished. The current rise appears to be driven by structural factors instead of mere speculation," stated the report from MP Financial Advisory Services.
"Given the industrial demand, silver possesses the potential to surpass the $50 threshold this time around," the financial consultancy highlighted.
The interest in gold and silver remains strong during the Diwali season in India, with consumers adapting their purchasing habits to accommodate for record prices, the report noted.
Shoppers are increasingly opting for lighter, lower-carat designs, utilizing exchange and old-gold initiatives, and exploring options like digital gold and sovereign gold bonds, it further added.
Gold prices surged from around $1,900 an ounce in November 2022 to nearly $3,850 by October 2025, while domestic prices exceeded Rs 1 lakh per 10 grams. Silver prices climbed from $24 an ounce to about $47, driven mainly by industrial demand in sectors such as solar panels, electronics, and electric mobility.
The increase in gold prices was supported by heightened expectations of US rate cuts, continued central bank acquisitions, and industrial restocking in the solar and electronics sectors. Gold has solidified its status as a reliable store of value amid economic fluctuations, while silver has gained momentum as an indicator of a broader industrial recovery, according to the consultancy.
As of June, the United States, the largest holder of gold reserves, possessed 8,133 tonnes, followed by Germany with 3,350 tonnes. Among emerging markets, China holds 2,299 tonnes, India 880 tonnes, and Turkey 635 tonnes, demonstrating a gradual shift away from reliance on the US dollar, the report elaborated.
Point of View
The persistent demand for gold and silver during the Diwali season underscores their cultural significance in India. As consumers adapt to rising prices, the focus on lighter, more accessible options reflects a keen awareness of market trends. This adaptation not only showcases resilience but also highlights the enduring value of these metals in both traditional and modern contexts.
NationPress
16/10/2025
Frequently Asked Questions
Why is gold still in demand despite high prices?
Cultural significance and traditional practices during festivals like Diwali ensure that gold remains a sought-after commodity, regardless of price increases.
What factors are driving silver prices?
Silver's increasing use in industrial applications, particularly in renewable energy technologies and electronics, is a significant driver for its price growth.
How have consumer buying patterns changed?
Consumers are shifting towards lighter and lower-carat designs, as well as exploring options like digital gold and sovereign gold bonds to adapt to high prices.
What is the current price trend for gold and silver?
Gold prices have risen dramatically from approximately $1,900 to nearly $3,850 per ounce, while silver prices have increased from $24 to about $47 per ounce.
What countries hold the most gold reserves?
The United States leads with 8,133 tonnes, followed by Germany, China, India, and Turkey, reflecting a broader diversification away from the US dollar.
