Gold and Silver Prices Plunge by 53%: Is This the Right Time to Buy, or Will They Fall Further? Expert Opinion
Why have gold and silver fallen from their all-time highs? Find out what experts say about whether this is the right time to buy, and which metal carries higher risk.
Gold & Silver Investment: A unique characteristic of gold and silver is that they can remain dormant for years before suddenly dominating the market. After a long period of stagnation, both metals reached new all-time highs in January 2026; however, they have since experienced a sharp decline, driven by a strong US dollar and Federal Reserve policies. The rally for gold began in October 2022, while for silver, it started in February 2024. On January 29, 2026, gold hit a historic peak of ₹1,76,306 (per 10 grams) and silver reached ₹3,84,632 (per kilogram) on the Indian market (MCX). They also set records in the international market.
Should You Buy Gold or Silver?
Currently, both metals are trading well below their peaks. Silver has lost more than half (53%) of its value, while the decline in gold (22%) has been relatively smaller. For long-term investment, gold appears to be a safer and better option. Historically, silver reacts more sharply to market factors (volatility) compared to gold, which makes it a riskier asset.
An Overview of the Decline in Gold and Silver Prices
Market
Metal
Highest Level
Current Price
Decline (%)
| International | Gold | $5,602 | $3,895 | 30% |
| International | Silver | $121 | $50 | 59% |
| Indian (MCX) | Gold | ₹1,76,306 | ₹1,37,308 | 22% |
| Indian (MCX) | Silver | ₹3,84,632 | ₹1,81,073 | 53% |
Source: MCX, Trading Economics
What Is the Expert Perspective on Gold?
Internationally, the price of gold has slipped below the psychological threshold of $4,000. According to Saumil Gandhi, Senior Analyst for Commodities at HDFC Securities, gold is hovering around $3,900 per ounce after touching a 52-week low on Thursday. He noted that following President Donald Trump’s remark that the U.S. does not need a peace deal with Tehran, hopes for an immediate diplomatic breakthrough vanished, triggering a surge in selling.
Nitesh Shah, a commodity strategist at WisdomTree, believes that following Thursday’s sharp decline, gold prices have now entered an "oversold" zone. He suggests that the metal is currently undervalued and is finding strong support around the $3,850 level.
Impact of Interest Rates on Prices
According to the CME FedWatch Tool, the market sees an 88% probability of a 25-basis-point hike in U.S. interest rates in December, while there is a 12% chance of a 50-basis-point increase. On Thursday, John Williams, President of the Federal Reserve Bank of New York, also indicated that the U.S. central bank might raise interest rates further to curb high inflation within a healthy economy. Although gold is considered an effective hedge against inflation, higher interest rates tend to diminish its appeal, as bullion does not yield any interest.
Diminishing hopes for peace in the Middle East led to a spike in oil prices, fueling concerns over rising inflation and interest rates. Consequently, gold prices plummeted by 3% on Thursday, reaching their lowest level in over a year.
Why does silver experience greater volatility?
According to Vikram Subburaj, CEO of Giottus.com, silver is witnessing a sharp correction (decline) driven by the surge in US Treasury yields and a stronger dollar. He noted that this significant drop in silver highlights its high sensitivity to shifts in risk appetite and expectations regarding industrial demand.
Like other asset classes, both gold and silver are volatile, though silver tends to be more so. Silver prices are directly impacted by fluctuations in industrial demand, which leads to greater price movement. While gold is primarily held as a 'store of value,' silver serves both as a store of value and as an industrial metal; consequently, it faces a dual set of concerns compared to gold.