The precious metals market experienced a sharp correction on Friday, following a significant rally over the past few weeks. Prices for Gold and Silver on the Multi Commodity Exchange (MCX) sharply declined as profit-taking occurred, prompted by external market factors that alleviated certain geopolitical and economic concerns.
Gold prices for 24 karats on MCX, which recently peaked at a record high of ₹1,32,294 per 10 grams, dropped approximately 3 percent to ₹1,25,957 per 10 grams. Silver saw an even more pronounced decline, falling over 8 percent from ₹1,70,415 per kg to ₹1,53,929 per kg.
Market analysts characterized this correction as an anticipated and healthy response after an extensive rally in recent months. Ajay Bagga, a banking and market expert, described the price drop as a “necessary tactical retreat” influenced by short-term sentiment shifts and profit-taking after a historic surge. He noted that a conciliatory stance from U.S. President Donald Trump regarding proposed high tariffs on China contributed to an easing of global tensions.
Bagga reiterated that the fundamental reasons for investing in Gold and Silver remain strong, citing structural factors such as global de-dollarization, ongoing supply deficits in Silver, central bank accumulation, and an environment of low real interest rates coupled with high geopolitical risks. He encouraged investors to regard the recent correction as an opportunity to enter or expand their long-term positions.
He further emphasized that Silver’s outlook is arguably more robust than that of Gold, attributing this to its dual role as both a precious and critical industrial metal. Despite recent speculative activity and market disruptions, he advised traders to exercise caution while maintaining a long-term bullish perspective supported by industrial growth.
Ajay Kedia, Founder and Director of Kedia Commodities, echoed Bagga’s sentiments, stating that the sudden decline was within expectations following the substantial price increases seen over the past two months. He remarked on the significant rally that had taken place from August until now, noting that the market had become overbought, making a correction necessary.
Kedia pointed out that planned discussions between the U.S. and China and talks between the U.S. and Russia regarding peace further contributed to the market pullback. He underscored that the recent fall should not be interpreted as a complete market reversal. “No one can predict when Donald Trump might take action. Currently, this marks the first significant drop in eight weeks, and the upcoming week will be crucial,” Kedia stated. He indicated that while consumers might purchase Gold and Silver for ceremonial purposes during Dhanteras, those looking for investment returns should remain cautious, as the market remains uncertain.
Kedia also noted, “Silver can plummet 8 percent in a single day, despite having doubled in the past year; a correction is still due.” Both experts concurred that, despite the recent sharp drops, the long-term outlook for precious metals remains favorable, with the current correction fitting within the normal context of a market cycle following a sustained rally.
Published on October 18, 2025
