New Delhi, Jan 31: The historic rally in gold prices in India appears to have come to an abrupt halt, with the yellow metal witnessing its sharpest-ever two-day fall. Gold prices plunged by more than ₹1,80,000 per 100 grams for 24-carat gold over the past 48 hours, marking the biggest two-day correction on record, after surging nearly 32 per cent during January.
The sell-off extended beyond gold, as silver prices in India also crashed sharply, recording their steepest-ever decline of nearly 20 per cent in the last two days. The fall follows an extraordinary rally in silver, which had jumped around 71 per cent in January alone, driven by speculative interest and global market cues.
Gold rates today
As of Friday, January 31, gold prices across categories registered a sharp decline. The 22-carat gold rate fell by ₹7,900 per 10 grams to ₹1,47,200, while 24-carat gold dropped by ₹8,620 per 10 grams to ₹1,60,580. The 18-carat gold rate also declined significantly, falling by ₹6,460 per 10 grams to ₹1,20,440.
Global triggers behind the fall
Market participants attributed the sharp correction primarily to a steep decline in international spot gold prices, which slipped below the psychologically important level of $5,000 per ounce overnight on Friday. The fall was triggered by speculation that the US Federal Reserve may adopt a more hawkish policy stance, raising concerns that interest rates could remain higher for longer.
Higher interest rate expectations tend to reduce the appeal of non-yielding assets such as gold. Adding to the pressure, spot silver prices plunged by over 26 per cent in international markets, while the US dollar index staged a recovery, further weighing on precious metals as safe-haven assets.
Domestic demand remains firm
Despite the sharp correction in prices, gold premiums in India rose to a more-than-decade high, reflecting strong underlying domestic investment demand. Analysts said this suggests that Indian buyers continue to view gold as a long-term hedge against inflation and currency volatility, even amid heightened short-term price swings.
Outlook for Indian gold users
For buyers, especially retail and long-term investors, the sharp correction may offer an opportunity to accumulate gold at relatively lower levels after the steep January rally. However, experts advise staggered purchases rather than lump-sum buying, given the possibility of continued volatility linked to global monetary policy signals.
For sellers and traders, the near-term outlook remains cautious. Profit booking after the record rally, combined with global uncertainty over interest rates and currency movements, could keep prices under pressure in the short term. That said, strong domestic demand and geopolitical risks may continue to provide a floor to prices, limiting the downside over the medium term.
Overall, while the record-breaking rally has paused, market observers believe gold and silver are entering a phase of consolidation rather than a prolonged downturn, with global cues and policy signals likely to dictate price direction in the coming weeks.
