Gold and silver prices in India have moved lower, with weak domestic demand cited as a key driver of the decline even as global bullion trends remained mixed, according to CNBC-TV18 Markets.

The fall in Indian gold and silver rates comes amid subdued local buying, and the report leaves open the question it poses for the market: what comes next for Indian consumers?

How Indian bullion prices take shape

India is one of the world's largest consumers of gold, with demand traditionally driven by jewellery purchases tied to the wedding season and festivals such as Diwali and Akshaya Tritiya. In global consumption tables compiled by the World Gold Council, India regularly ranks alongside China at the top, and a large share of its buying comes from rural areas, where harvest proceeds often fund purchases. Indian demand is also closely price-sensitive: when rates run high, consumers commonly defer purchases, and the premium or discount local dealers charge over the landed cost of imported metal is a widely used gauge of how strong domestic buying actually is.

Domestic gold and silver rates broadly track international benchmark prices, adjusted for the rupee-dollar exchange rate as well as import duties and local taxes. Gold in India is typically quoted per 10 grams, while silver is quoted per kilogram. Import duty feeds directly into landed cost: in the July 2024 Union Budget, the government cut the customs duty on gold from 15% to 6%, a reduction that lowered domestic landed prices at the time.

Global influences on bullion

In international markets, gold prices are widely influenced by movements in the US dollar, interest-rate expectations, central bank buying, and safe-haven demand during periods of geopolitical or economic uncertainty. Because gold pays no interest, its relative appeal shifts as rate expectations move. Central banks have been consistent buyers in recent years — a group that includes the Reserve Bank of India, which has steadily added gold to its foreign exchange reserves.

Silver, which carries substantial industrial applications — including in electronics and solar-panel manufacturing — is also shaped by industrial demand alongside its precious-metal status. Industrial uses account for more than half of global silver demand, according to Silver Institute data, with photovoltaics a key growth component.

According to the report, weak domestic demand combined with mixed overseas cues has contributed to the fall in Indian gold and silver prices. For consumers watching where rates go from here, the customary signposts are the same forces behind the current mix: the festive and wedding purchase calendar, the rupee's path against the dollar, and the direction of US rate expectations — the overseas cues the report describes as mixed.

This article is for informational purposes only and should not be construed as investment advice. Readers should consult certified experts before making any investment decisions.

Source: CNBC-TV18 Markets