Within the first week of October, gold and silver prices have exceeded their prior highs. The rise in these metal prices is linked to several variables, including the start of the festival season, macroeconomic conditions, and variables surrounding domestic market prices.
Let’s address the performance of gold and silver prices before going further into what drives the price increase.
Over the last few years, both gold and silver have been experiencing a surge in value. At present, their prices follow the pattern below:
On 6 October 2025, the price of gold stood at approximately ₹11,939 per gram for 24 carats or roughly ₹1,19,390 per 10 grams. Conversely, the rate was hovering around ₹7,950 per gram in the early days of January this year, demonstrating approximately a 50% growth in the previous nine months.
The main reason for this growth was that gold functioned as a safe haven during periods of global economic uncertainty and expected central bank rate cuts.
This price point in Mumbai, Delhi, Kolkata, and Bangalore was consistent across all cities, suggesting it was a synchronised national trend driven by the macroeconomic sphere rather than local supply-demand market misbalances.
On October 6 2025, spot gold prices internationally were just under $3,860 per ounce, compared to $2,580/oz in January, which is an increase of 49.6% year-to-date.
On 6 October 2025, the price of silver experienced a notable regional premium in Chennai and Thiruvananthapuram, where payable rates were ₹1,64,900 per kilogram, compared to ₹1,54,900/kg in Delhi, Mumbai, and Kolkata (the difference of ₹10,000 being attributed to the peripheral situation). This price differential was seen in relation to greater industrial demand from electronics and solar panel manufacturers closer to home. Another major consideration contributing towards the price differentials was rising logistic costs associated with southern India.
Here is a detailed explanation of the factors driving gold and silver prices in India.
October is the beginning of India’s busiest festive season, as Navratri, Dussehra, Sharad Purnima, and Diwali are all considered auspicious occasions to buy gold and silver. This time of the year, most jewellers experience higher foot traffic and pre-bookings, despite elevated gold and silver pricing. The seasonal demand functions as a sentiment amplifier operating in a bullish manner to increase the price along with cultural and emotional values. Analysts expect demand to rise even more as Dhanteras approaches on 21 October, further amplifying the bullish sentiment.
On 6 October 2025, the US Dollar Index (DXY), which tracks the value of the dollar against six major currencies, decreased to 93.2 from a level of 104.7 in April 2025. When the dollar declines, gold and silver become less expensive for holders in other currencies. In this way, the weaker dollar increases demand globally. This depreciation is primarily due to dovish signalling from the Federal Reserve as well as weaker macro US indicators, such as declining job growth and consumer confidence. For Indian investors, the rupee-dollar exchange rate is a key macroeconomic lever on the import costs of bullion, and necessarily plays a key role in domestic price formation.
In 2025, central banks around the world will have accumulated gold reserves due to inflation hedging and diversification of reserves, increasing price pressure stemming from this institutional purchasing. This year, even the Reserve Bank of India (RBI) added to its gold reserves, consistent with the global trend. Developments of this nature solidify the long-term confidence in gold as a monetary stabiliser, which in turn boosts the sentiment of retail investors.
Gold and silver exchange-traded funds (ETFs) have seen sustained inflows in 2025, as investors prefer paper gold for liquidity and tax efficiency. ETFs bypass GST and making charges, offering a cleaner route for long-term growth. With expense ratios around 0.8%, they are cost-effective compared to physical gold. This shift reflects a maturing investor base prioritising efficiency and long-term returns.
Silver’s rally is not just investment-driven. 60–70% of demand comes from industrial use, especially in solar panels, electronics, and EVs. With India’s push for green energy and global tech expansion, silver’s utility has expanded. In September alone, silver rose 19.4%, outperforming gold’s 13% gain. This dual demand, investment and industrial, makes silver a unique sentiment barometer.
Despite the bullish long-term outlook, October has seen mild corrections due to profit booking. For instance, gold fell ₹3,920 per 10g and silver ₹6,000 per kg in early October. This reflects tactical investor behaviour, booking profits ahead of Diwali while anticipating re-entry at lower levels. Such dips are viewed as buying opportunities, rather than trend reversals.
What Technical Indicators Suggest About Gold and Silver Prices Technical analysts stated that gold has support at ₹1,06,660 and resistance at ₹1,22,000. For silver, support is at ₹1,34,400, and resistance is at ₹1,50,000. These areas can gauge investor sentiment. If prices are moving down toward the support zone, it typically inspires a buying tendency, while a resistance zone creates caution. The current trading levels indicate that it has shifted from a consolidation phase to a more bullish phase, with sentiment remaining optimistic but tempered by tactical moves.
Gold and silver are experiencing strong bullish momentum due to festive-season demand, a weaker US dollar, central bank purchases, ETF inflows, and robust industrial silver consumption. While some short-term profit booking may have caused some minor price corrections, the technical support for both gold and silver could offer bullish traders with additional buying opportunities. Overall, investors are closely tracking support and resistance levels to gauge entry and exit trends amid festive demand.
This article is for informational purposes only and does not constitute financial advice. It is not produced by the desk of the Kotak Securities Research Team, nor is it a report published by the Kotak Securities Research Team. The information presented is compiled from several secondary sources available on the internet and may change over time. Investors should conduct their own research and consult with financial professionals before making any investment decisions. Read the full disclaimer here.
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