Gold continues to serve as one of the best performing assets of being a safe haven and financial security during uncertainties, but it isn’t without risks. The price of gold fluctuates and different forms of investment in the precious metal carry various risks.
A month ago, gold hit a record high of Rs 1,32,294 per 10 grams on the back of festive season. The price of precious metal has decreased by 6.88 percent at Rs 1,23,180 on November 17, at 9 a.m., on the MCX, and down 0.3 percent from previous day’s close.
“Given that prices have already rallied 60–70 percent this year, some degree of cooling off and profit booking is warranted,” said Manav Modi, Precious Metal Research and Analyst at Motilal Oswal Financial Services Ltd.
How should investors see this price movement in bullion rally? What does the US Federal Reserve interest rates cut mean for near-term gold and silver price trends in India? What do central banks continue to accumulate gold and what it means for long-term price stability? How has industrial demand support contributed to Silver’s performance this year? Let’s explore.
Long-term outlook for gold remains bullish
“Impact on economic data after the reopening of the US government after a 43-day shutdown, potential liquidity infusion, central-bank accumulation, steady ETF inflows and broader uncertainties continue to provide a strong floor for prices. For investors, the strategy should be to book profits on sharp rises and accumulate on dips, as the long-term outlook for bullion remains bullish,” said Modi.
With the US Federal Reserve (the Fed) cutting rates to 3.75–4 percent in October, markets initially believed political pressure from President Donald Trump may have influenced the cuts. Chair Powell highlighted that inflation risks remain elevated due to the lagged impact of tariffs and the recent shutdown, while visibility on growth is still unclear.
“Unless weakness emerges in the labor markets, the Fed is unlikely to shift into a full easing cycle. This is reflected in market pricing. December rate-cut probability has fallen sharply from around 90 percent to nearly 50 percent. Uncertainty has capped the upside in gold and silver in the near term, though any renewed dovish shift or confirmed rate cut in December would re-energize the rally in prices.
“Gold continues to witness unusually large daily swings amid higher implied volatility (IVs), making it essential for investors to be cautious and have a staggered way of investment. On domestic market—assuming USD/INR near 90—Rs 1,18,000 to Rs 1,20,000 serves as a strong support range. If this base remains intact, the broader trend points toward an upside move toward Rs 1,30,000 and Rs 1,37,000 over the next year,” said Modi.
Why do central banks accumulate gold?
According to recent World Gold Council report, central banks purchased 220 tonnes of gold in Q3 2025, which is 28 percent increase from the previous quarter. The Reserve Bank of India (RBI) added nearly 600 kilos between April and September 2025, taking its reserves to about 880 tonnes.
“This steady accumulation underscores gold’s role as a strategic hedge amid rising global uncertainties. Even when short-term selling pressure emerges, the structural demand from central banks provides an anchor for long-term price stability. This rebalancing continues to support global demand and is likely to remain a key pillar for bullion prices going forward, reinforcing gold’s position as a long-term store of value in an increasingly volatile macro environment,” said Modi.
What about Silver? Silver has also clearly outperformed gold this year due to its dual purpose of serving as safe-haven assent and for its industrial use. According to Modi, its underlying momentum remains strong despite bouts of sharp profit-taking across precious metals. With accelerating adoption of EVs, solar manufacturing, and broader clean-energy applications across China, the US, and domestic markets, industrial consumption is set to grow further.
“While global supply tightness remains a structural issue, some of the immediate shortages have eased. At the same time, demand is consistent, both on the industrial side and through investment channels such as ETFs. Combined with rising investment demand, these factors suggest that silver’s upward momentum can continue in the coming months,” said Modi.
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Should investors continue to allocate to gold and silver ETF?
Gold and silver ETFs in India have seen a strong surge in participation, with gold ETF AUM approaching Rs 1 lakh crore mark and silver ETF AUM rising toward Rs 35,000 crore. This sharp growth reflects sustained investor confidence in the product and the underlying.
“For those with an investment horizon of one year or more, ETFs provide a transparent, liquid, and cost-effective avenue for an inventor to invest in gold and silver. Given the current macro environment and ongoing uncertainty, allocating a portion of one’s portfolio to gold or silver ETFs can be a prudent diversification strategy based on one’s risk profile,” said Modi.
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