Silver Prices Plunge ₹10,577/kg Amid October Losses
Silver and gold prices continue to decline, with silver losing ₹45,000/kg this month as inflation and interest rate hikes loom.
Silver prices fell to ₹1,79,600/kg, marking a significant drop in October.
Gold prices hit a seven-month low, declining ₹10,787/10g this month.
Rising inflation and interest rates are driving investors away from precious metals.
In a significant downturn, silver prices experienced a sharp decline during Friday's trading session, with the December delivery contract on the Multi Commodity Exchange (MCX) dropping by ₹10,577 per kilogram. This decline brought the price down to ₹1,79,600 per kg, marking a low not seen since December. The losses in October have now accumulated to nearly ₹45,000 per kg, positioning silver for its most substantial monthly fall in 2026.
Historically, silver had a robust performance in 2025, but recent trends indicate a reversal, with over 50% of those gains evaporating. Factors contributing to this decline include rising crude oil prices and ongoing inflation concerns, which have intensified expectations for interest rate hikes in the United States. Similarly, gold prices have also faced downward pressure, falling for the third consecutive session, with a drop of ₹4,347 per 10 grams, reaching a low of ₹1,38,249, the lowest since March.
From its peak of ₹4,20,048 per kg, silver has lost 57% of its value, while gold has decreased by ₹42,321 per 10 grams from its record high of ₹1,80,779. Traditionally viewed as a hedge against inflation and a safe-haven asset, gold's appeal diminishes with rising interest rates, prompting investors to seek yield-bearing alternatives. Recent data showed a 0.5% month-on-month increase in the US Personal Consumption Expenditures (PCE) price index, the largest rise since March, with annual inflation accelerating to 3.6%.
The implications of these price movements are significant for investors and the broader market. The Federal Reserve's decision to maintain interest rates at 3.75%-4% has been influenced by persistent inflationary pressures, exacerbated by geopolitical tensions in the Middle East, which have kept energy prices high. Traders are now anticipating a 75% likelihood of a rate hike in December, further impacting the attractiveness of non-yielding assets like gold and silver.
Looking ahead, market participants will closely monitor upcoming economic indicators and central bank decisions. With inflationary pressures showing no signs of abating and energy prices remaining elevated, the outlook for precious metals remains uncertain. Investors are advised to stay informed and consider expert guidance before making investment decisions.
