Gold Prices May Touch Rs.1.25 lakh by Diwali, Silver Seen Soaring

Surat | Gujarat — In a stark forecast that could redefine festive season purchases, the Indian Bullion Jewellers Association (IBJA) has predicted that the price of gold may rise to ₹1.25 lakh per 10 grams by Diwali 2025, while silver could touch an unprecedented ₹1.5 lakh per kilogram. The projection underscores the mounting pressure on middle-class households as global uncertainty and China’s aggressive gold reserve build-up fuel price hikes.

“Gold is no longer just a traditional purchase; it is rapidly becoming a premium luxury item, moving beyond the reach of ordinary Indian families,” said Nainesh Pachigar, bullion market analyst. He added that silver is fast emerging as the affordable alternative, with sales of silver jewelry and coins already witnessing a sharp uptick.

Global Factors Driving the Surge

Experts attribute the surge primarily to China’s growing gold reserves and broader geopolitical uncertainty, which continue to push precious metals higher. “If the trade war intensifies, we expect gold prices to move in the range of ₹1.03 lakh to ₹1.25 lakh per 10 grams,” said an IBJA spokesperson.

The festive season, including Diwali and Christmas, typically drives demand. However, analysts warn that this year, demand may contract by nearly 700 tonnes due to prohibitive prices.

Middle-Class Buyers Hit Hard

Traditionally, Indian households buy gold during wedding season (November–December) and major festivals. But with the sharp rise in prices, middle-class buyers may be forced to cut down on purchases.

“Ordinary families who once bought gold bangles or chains for weddings may now turn to silver or buy very small quantities,” said Pachigar. “The emotional connection with gold remains, but the affordability factor is broken.”

This shift has already been reflected in the bullion markets where, according to IBJA, only 25% of purchases are currently investment-driven, while retail buyers are scaling back.

Silver Shines Amid Gold’s Rise

While gold is becoming harder to buy, silver is seeing renewed interest. Currently trading around ₹1.34 lakh per kilogram, silver is projected to rise to ₹1.20–1.50 lakh per kilogram in the coming months. Its affordability compared to gold, coupled with strong industrial demand, is bolstering its appeal among buyers.

“Silver has always been seen as gold’s younger sibling, but in times like this, it becomes the practical choice,” said a jeweler from Ahmedabad’s bullion market.

Investor’s Opportunity, Consumer’s Dilemma

For investors, these soaring prices are an opportunity to lock in higher returns. But for middle-class consumers, especially during festivals and weddings, the situation presents a painful dilemma.

“Investors will benefit, but the cultural significance of gold in India means families will feel the pinch,” said an IBJA member. “We may see people shifting to silver, platinum, or even gold-plated ornaments as stopgap alternatives.”