Gold and silver prices have witnessed a sharp correction over the past 20 days, raising fresh concerns among investors and households alike. Gold, which was nearing ₹2 lakh per 10 grams in late January, has now slipped close to ₹1.5 lakh. Market estimates suggest that if the current trend continues, prices could gradually decline even below ₹1 lakh by 2027.
In today’s episode of DNA, Rahul Sinha, Managing Editor of Zee News, conducted a detailed analysis of the factors driving this decline and what it means for investors. On the Multi Commodity Exchange (MCX), 10 grams of 24-carat gold fell about 1% in the evening session to around ₹1,53,000, while in the bullion market it dropped by ₹2,242 to nearly ₹1,51,000. On January 29, gold in the futures market had touched ₹1,93,000, marking a fall of ₹40,000, or 21%, in just 20 days.
Silver has corrected even more sharply. On MCX, prices declined nearly 3% to around ₹2,32,000 per kilogram. Just 20 days ago, silver had crossed ₹4,20,000 per kilogram, indicating a drop of ₹1,88,000, or about 45%. This downturn follows a strong 2025, when gold delivered approximately 75% returns, and silver surged nearly 170%. However, 2026 has begun with steep losses for recent investors.
The decline is not limited to domestic markets. Internationally, gold is trading below $5,000 per ounce. A key trigger behind the global trend is a report, cited by international media and based on internal Russian government documents, suggesting that Russia is considering a return to the US dollar-based settlement system. Since 2022, following Western sanctions, Russia has reduced its dependence on the dollar and shifted to trading in rubles or partner currencies, including rupees in trade with India. This de-dollarization trend has prompted several central banks to increase their gold reserves, supporting global prices.
If Russia resumes dollar-based trade, demand for the dollar could rise, potentially reversing de-dollarization. Gold and the dollar typically share an inverse relationship; stronger dollar demand often pressures gold prices. Analysts also suggest that central banks may slow their gold purchases, or even increase supply in the market, if dollar usage expands. Additionally, improved relations between Donald Trump and Vladimir Putin could ease geopolitical tensions, reducing safe-haven demand for gold.
The price correction has mixed implications. Families planning weddings and jewelry purchases may benefit from lower prices, while investors in physical and digital gold face erosion in portfolio value. Many individuals who shifted funds from equities to precious metals during the rally are now reassessing their strategy.
Meanwhile, experts point to rising opportunities in industrial metals such as aluminum. Over the past year, aluminum prices have increased by roughly 30–35%, driven by supply constraints and growing demand. Production remains energy-intensive, with nearly one-third of costs attributed to electricity. High power prices have led to factory shutdowns in countries like Australia and Mozambique, while China has capped output. At the same time, aluminum use has expanded in air conditioning and electric vehicles, where usage has risen to about 200 kilograms per vehicle, 50% more than before, as well as in energy storage systems and data centers.
Despite record-high prices earlier, India’s appetite for gold imports remained strong. According to data from the Ministry of Commerce and Industry, gold imports in January exceeded $12 billion, compared to $2.68 billion in January last year. This surge pushed India’s trade deficit to around $35 billion, up from approximately $23 billion a year ago, an increase of nearly 48%, largely driven by higher gold imports.
With volatility persisting in precious metals and global macroeconomic factors in flux, investors are closely watching how currency dynamics, central bank policies, and geopolitical developments shape the next phase of the commodities cycle.
