Gold, Silver Prices Swing: Why Precious Metals See Volatility | Details Inside

Silver in the national capital was priced at Rs 394.9 per gram, or Rs 3,94,900 per kilogram.

Gold has traditionally been viewed as a safe-haven asset, attracting investors seeking protection during periods of financial and geopolitical uncertainty.

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Gold and silver remained in sharp focus after touching record highs earlier in the week. On Friday, both metals witnessed a steep decline, triggering questions over the factors behind the sudden pullback. Prices stabilised and remained largely range-bound on Saturday.

According to news agency PTI, gold of 99.9 per cent purity fell sharply by Rs 14,000, or 7.65 per cent, to Rs 1,69,000 per 10 grams (inclusive of all taxes) on Friday. The metal had touched a record high of Rs 1,83,000 per 10 grams on Thursday after rising by Rs 12,000 in a single session.

Silver also saw heavy selling, sliding Rs 20,000, or nearly 5 per cent, to Rs 3,84,500 per kilogram (inclusive of all taxes). In the previous session, the white metal had surged Rs 19,500 to an all-time high of Rs 4,04,500 per kg.

Gold And Silver Prices Across Indian Cities

In Delhi, gold prices on January 31 stood at Rs 16,934 per gram for 24-karat gold, Rs 15,524 per gram for 22-karat gold and Rs 12,704 per gram for 18-karat gold, also referred to as 999 gold, according to Good Returns.

Silver in the national capital was priced at Rs 394.9 per gram, or Rs 3,94,900 per kilogram.

In Mumbai, 24-karat gold was quoted at Rs 16,919 per gram, 22-karat at Rs 15,509 per gram and 18-karat gold at Rs 12,689 per gram. Silver prices matched Delhi at Rs 394.90 per gram or Rs 3,94,900 per kilogram.

Hyderabad mirrored Mumbai’s gold prices, with 24-karat gold at Rs 16,919 per gram, 22-karat at Rs 15,509 per gram and 18-karat gold at Rs 12,689 per gram. Silver traded at a premium in the city at Rs 404.90 per gram, or Rs 4,04,900 per kilogram.

Why Gold And Silver Rose Sharply

Gold has traditionally been viewed as a safe-haven asset, attracting investors seeking protection during periods of financial and geopolitical uncertainty.

With global geopolitical tensions rising, trade war concerns resurfacing, uncertainty around the future path of interest rates and signs of a shifting global order, investors have increasingly turned to assets perceived as stable, according to a report by Conversation UK.

At the same time, central banks worldwide have stepped up gold purchases, reinforcing the metal’s role as a store of value in uncertain times.

Retail investors have also played a significant role. According to the report, individuals have increasingly treated gold, silver and other precious metals both as a hedge against uncertainty and as momentum trades, buying as prices rise to keep pace with broader markets.

What Triggered Friday’s Correction

The sharp dip on Friday was triggered as financial markets reacted to early reports that former US president Donald Trump may nominate Kevin Warsh as chair of the US Federal Reserve, an institution central to global financial stability.

As prices climbed rapidly, participation from retail investors rose, particularly through gold exchange-traded funds (ETFs), which allow exposure to gold without holding physical bullion.

Why Silver’s Move Was More Volatile

Silver had significantly outperformed gold ahead of Friday’s correction, jumping more than 60 per cent in a month compared with gold’s roughly 30 per cent rise.

Unlike gold, silver has dual demand. It serves both as a safe-haven asset and as a key industrial input, with rising usage in solar panels, electric vehicles and semiconductors.

Supply constraints have amplified the rally. The silver market has been in deficit for five consecutive years, with consumption exceeding mine production. Because most silver is produced as a by-product of other metals, ramping up supply is not easy, the report noted.

Risks For Retail Investors

Data suggests retail investors have been buying silver aggressively as prices rise, a classic case of fear of missing out.

However, silver remains highly volatile. Between February 2025 and just before Friday’s decline, prices had surged 269 per cent. Even before the drop, silver showed annualised volatility of 36 per cent, almost double gold’s 20 per cent over the same period.

Sharp rallies can be followed by equally sharp reversals. Retail investors entering late risk buying near the peak, while institutional investors and central banks typically build positions over longer periods at lower prices.

Unlike equities or bonds, gold and silver offer no dividends or interest. Returns depend entirely on further price appreciation, and as recent movements have shown, losses can be sudden and severe.