Key facts
- Gold and silver prices have seen a significant correction from recent highs.
- Gold fell by 1.51% to Rs 1,48,484 per 10 grams on MCX, while silver dropped 1.37% to Rs 2,35,256 per kg.
- Gold is down 7.5% from its May 13 peak, and silver has declined 18% in the same period.
- Jewelers expect demand to increase for weddings and festivals starting mid-June.
- The price drop coincides with the end of the inauspicious Adhik Maas and the start of the summer wedding season.
Gold and silver prices have experienced a significant decline, sparking optimism for increased jewelry demand as the wedding and festive season approaches. The prices fell sharply on Tuesday, with gold dropping by 1.51% to Rs 1,48,484 per 10 grams on the Multi Commodity Exchange (MCX) and silver rates decreasing by 1.37% to Rs 2,35,256 per kg.
Jewelers noted that this price correction, the largest since May 13, could attract consumers for wedding purchases, which typically begin in the latter half of June and extend through mid-August. Gold prices are now down 7.5% from a peak of Rs 1.6 lakh per 10 gm on May 13, while silver has fallen 18% from its high of Rs 2.87 lakh per kg.
Analysts suggest that the precious metals are consolidating near key support levels as markets assess a tentative Israel-Iran ceasefire alongside persistent inflation concerns and the possibility of further interest rate hikes. The price drop is occurring as the inauspicious Hindu month of Adhik Maas concludes on June 15, after which buying typically resumes.
Surendra Mehta, national secretary of the India Bullion & Jewellers Association, stated that many consumers are expected to purchase gold for the upcoming festive season at these lower price points. The summer wedding season, running from June 16 to August 15, is anticipated to see moderate demand, particularly from Tier 2 and Tier 3 cities, according to Vikas Kataria, promoter of D P Abhushan. He added that strong cultural affinity for gold, coupled with the increasing acceptance of lighter-weight and more affordable jewelry formats, will support this recovery.
Approximately 60% of India's annual gold demand, which ranges between 800-850 tonnes, originates from rural areas. In these regions, 22-carat jewelry remains popular for traditional and wedding purchases, viewed by many as both adornment and investment. Meanwhile, younger consumers are increasingly drawn to 18 and 14-carat jewelry, including studded pieces, due to their affordability, contemporary designs, and suitability for daily wear.