This Dhanteras, the choice between gold and silver is influenced by recent fluctuations in their prices. The past year has seen dramatic changes in gold prices, which reached nearly $5,600 an ounce in January 2026, before dropping below $4,000 and then recovering. Indian consumers have experienced these price swings, exacerbated by the rupee’s performance against the dollar.

Silver has also experienced volatility, with prices soaring above $100 an ounce before experiencing a sharp decline. Industry experts noted that both metals are currently facing a complex set of factors that impact their prices.

While global uncertainty has led many to invest in precious metals, high US Treasury yields and a stronger dollar have exerted downward pressure on prices. Despite this, investment demand remains robust, as indicated by record global gold ETF holdings and significant inflows during the third quarter.

Seasonal Patterns in Gold Prices

The behaviour of gold prices around Dhanteras and Diwali shows a seasonal pattern, although it is not a guaranteed predictor of future performance. Over the past decade, gold has typically performed better in the month leading up to Diwali than in the month following it. Notably, in 2025, gold prices surged nearly 20% in the month before the festival.

However, there have been exceptions, such as in 2016 and 2021, when prices fell in the lead-up to Diwali. The overall price of gold is influenced by various global factors, including the value of the US dollar, interest rates, and inflation. Rising interest rates often make other investments more appealing, thereby reducing gold’s attractiveness.

Global tensions, economic uncertainty, and rising government debt can drive investors towards gold as a safe haven for wealth preservation. Analysts believe that despite short-term fluctuations, gold will remain a relevant investment in the long term.

Investment Considerations for Dhanteras Buyers

Central banks worldwide have continued to increase their gold reserves, with a reported net purchase of 321 tonnes in the July to September quarter. Additionally, gold-backed exchange-traded funds attracted 211 tonnes during the same period. These purchases represent a significant source of demand beyond individual jewellery buyers.

In India, investment demand has shown resilience, even amid high prices affecting jewellery purchases. The World Gold Council’s report highlighted a sharp rise in domestic gold ETF inflows in September, indicating that some buyers are opting for investment products alongside physical jewellery.

For those purchasing gold this Dhanteras, it is essential to distinguish between the reasons for buying and the expectations of returns. Jewellery intended for personal occasions serves a different purpose compared to investment products like coins or gold-backed funds. Additionally, jewellery often incurs making charges that may not be recouped upon resale.

The recent price rally does not guarantee that prices will not decline again. Therefore, it may be prudent to view gold purchases this Dhanteras as long-term investments rather than short-term speculative bets. Ultimately, the tradition of buying gold during this festival often focuses on wealth preservation rather than immediate financial gain.

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