By November 2025, both gold and silver prices in India will have reached new record highs. Currently, 24-karat gold is trading at around ₹12,300 per gram, and silver is priced at approximately ₹1.52 lakh per kilogram. These prices have been steadily rising over the past few months, leading to questions from investors and ordinary buyers alike – why are gold prices so high today, and what is driving the surge in silver prices? In this blog, we will explore, in simple terms, the global and domestic economic factors influencing gold and silver prices in 2025 – so you can understand not just the prices, but the whole story behind them.
Global Economic Trends Driving Precious Metals Up
Increased Buying by Central Banks : Globally, according to the World Gold Council, various central banks added approximately 19 tons of gold to their reserves by August 2025. In India, the Reserve Bank of India purchased approximately 4 tons of gold between January and September 2025, significantly less than the same period last year (50 tons). This buying has established gold not just as a jewellery metal, but as a “reserve asset,” contributing to above-average prices.
Changes in Imports and Demand in India: In August 2025, India imported approximately 64.17 tons of gold and 410.8 tons of silver, costing US$5.4 billion and US$451.6 million, respectively. A decline in silver imports has been observed; in the first eight months, imports totalled approximately 3,302 tons, about 42% less than the same period last year. These import fluctuations have made silver prices in India more volatile; premiums may increase due to local shortages.
Impact of Inflation, Dollar, and Interest Rates: Global inflation, the weakening US dollar, and expectations of lower interest rates have made gold and silver attractive investment options. In India, when the rupee weakens, imported gold becomes more expensive, which directly affects gold prices.
Shifts in Jewellery and Investment Demand: Jewellery demand in India has declined. In the third quarter (Q3) of 2025, jewellery demand decreased by approximately 31%, while investment-related gold demand increased by up to 20%. This indicates that gold is now being viewed not just for weddings, festivals, or adornment, but as an investment asset.
Policy, Regulation, and Import Duty Changes: India reduced the import duty on silver from 15% to 6% in 2025. The base import prices for gold and silver have also been recently revised in India, leading to changes in wholesale costs. Such policy changes have an immediate impact on prices by affecting the supply chain, leading to fluctuations in both gold and silver prices.
Domestic Factors: Why India’s Gold Rate Today Keeps Rising
Changes in Import Duties : The Indian government reduced the import duty on gold and silver from 15% to 6% after July 2024. This encouraged legal imports, but high global prices and low domestic supply prevented prices from stabilising.
GST and Other Taxes: The Indian GST rate on gold sales is 3%, applicable to physical gold (bars/coins/jewelry). This tax structure has maintained consistent upward pressure on retail prices.
Rupee Depreciation and Import Costs: Since most gold and silver in India are imported, a weaker rupee against the dollar makes gold more expensive. This has led to an increase in both gold and silver prices.
Demand-Supply Imbalance: Due to high prices, gold imports into India fell to 21 tons in June 2025, a nearly 40% year-on-year decrease. The supply shortage increased retail market premiums, forcing end consumers to pay higher prices.
Control on Illegal Imports: There has been stricter control over gold and silver smuggling; for example, gold seizures at a major airport decreased by 68%. This increased reliance on legal supply in the domestic market, but prices were already high.
Silver Prices 2025: The Industrial Metal’s Boom Story
Record Increase in Industrial Demand: Demand for silver in solar panels, electric vehicles, and electronic chips is rising rapidly. In 2024, global industrial demand reached 680 million ounces, the highest level ever recorded. Strong demand from the solar sector is expected to continue in 2025, driving silver prices steadily upward.
Global Supply Shortage and Production Deficit: According to the Silver Institute, a supply deficit of 148.9 million ounces was recorded in 2024, and this trend is expected to continue in 2025. Slower mining production and reduced recycling have created a real shortage in the market, which is also impacting Indian markets.
Growing Investor Interest in India: Silver ETFs have delivered returns of over 50% so far in 2025, driving a surge in investor interest. Many investors are now choosing silver as a cheaper alternative to gold, which has fueled investment demand.
Sharp Decline in Indian Imports: Between January and August 2025, India imported only 2,580 tons of silver, compared to 5,600 tons during the same period last year. The decline in imports and rising domestic demand have intensified supply-side pressure, further driving up silver prices in India.
Record Prices in the Domestic Market: In October 2025, retail silver prices in major cities such as Delhi and Mumbai reached close to ₹1.45 lakh per kilogram. This is not solely a result of investment demand but a combined effect of increased buying from both industries and consumers.
Role of Central Banks and ETFs in Price Movement
Active Buying by Central Banks: Global central banks purchased approximately 220 tonnes of gold in the third quarter of 2025, about 28% more than in the previous quarter. This marks the third consecutive year that such purchases by the official sector have exceeded 200 tonnes, providing a strong base for metal prices.
Record Inflows into Gold ETFs in India: Gold ETFs in India recorded net inflows of approximately US$902 million (approximately ₹ 8,363 crore) in September 2025, more than four times the inflows in the preceding months. Total Assets Under Management (AUM) are now close to US$10 billion.
Investment Flows Putting Pressure on the Market : Investor trends have emerged regarding gold and silver ETFs: in India, these metals accounted for approximately 72% of passive fund flows alone in September 2025. This indicates that retail and mid-segment investors are also moving towards these metals, further increasing demand-side pressure.
Support Structure Preventing Prices from Falling : Central bank purchases + ETF inflows are collectively preventing metal prices from falling. For example, global reports indicate that in recent quarters where gold prices declined, central banks continued to buy. Therefore, the possibility of a sudden drop in gold and silver prices in India appears limited for now.
Gold vs. Silver: Investment Comparison 2025
| Point | Gold | Silver |
| Return in 2025 (YTD) | 44-45% growth globally; Gold ETFs in India have given approximately 53% YTD returns. | 57% year-to-date increase; however, prices experienced sharp fluctuations throughout the year. |
| Price (November 2025) | Approximately ₹1,22,800 per 10 grams (24k) a record level. | Approximately ₹1.45 lakh per kilogram, a historical high. |
| Volatility | Fixed assets are suitable for long-term wealth protection. | More volatile, price changes linked to industrial demand. |
| Main demand factors | Central bank purchases, safe-haven investments, rupee weakness | Industrial demand in the solar, electronics and EV sectors. |
| Investment Options in India | SGBs, Gold ETFs, Digital Gold, Jewelry | Silver ETFs, ETPs, physical bars and coins |
| Investment Objective | Stability and protection against inflation | High returns and diversification opportunities |
| Risk level | Less | More |
| Suitable Investor Profile | Those seeking long-term and secure returns. | Those seeking quick profits by taking high risks. |
Future Outlook: What Experts Expect for 2025–26
Gold Price Forecast:
- Goldman Sachs estimates that gold could reach approximately US$4,000 per ounce by mid-2026.
- According to J.P. Morgan, the average price could be around US$3,675 per ounce in the fourth quarter of 2025, and it could touch the $4,000 level in 2026.
- In India, the gold rate will depend on the weakness of the dollar and the stability of interest rates; currently, the trend is upward.
Silver Price Forecast:
- HSBC has projected an average silver price of US$35.14 per ounce in 2025 and US$33.96 per ounce in 2026.
- Motilal Oswal believes that silver prices in India could reach approximately ₹2.4 lakh per kilogram by the end of 2026.
- According to The Silver Institute, industrial demand will increase by approximately 3% in 2025, while jewelry demand may slightly decrease.
Potential Scenarios:
- If the dollar remains weak and inflation stays high, both gold and silver will remain at elevated levels.
- If interest rates rise or the economy stabilizes, there may be a slight softening in prices.
- Investors should monitor indicators such as price trends, the rupee-dollar exchange rate, and industrial demand.
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Conclusion
Gold and silver have always been considered reliable investments, but changing circumstances teach us one thing: nothing is stable in the market. A wise investment is one that is made thoughtfully, not impulsively. Every fluctuation presents a new opportunity; you just need a keen eye. Therefore, when investing, rely on your strategy, not on trends that’s true wisdom.
Disclaimer: This article is for informational purposes only and does not constitute financial advice.
