Gold prices have experienced a significant correction from their January 2026 peak, declining from ₹1,76,274 per 10 grams to approximately ₹1,39,701 per 10 grams. According to Mint, this represents an overall drawdown of around 24% in US dollar terms, though the decline is more pronounced in Indian rupee terms at 17% due to higher import duties making gold more expensive. Silver has experienced an even sharper correction, falling 47% in US dollar terms and 40% in rupee terms, as reported by Mint. The decline is attributed to dashed hopes of Federal Reserve interest rate cuts, reduced speculative demand, and a strengthening US dollar, as reported by Business Insider. Latest reports from GoodReturns.in indicate that silver prices remained unchanged for the second consecutive day on July 8, 2026, trading at ₹2.45 lakh per kg after last week's rebound. However, Mirae Asset reports that silver found support around yesterday's low of $57.22 and was trading at $60.23 on Thursday, up 3% for the day, with the white metal surging 5.51% to close at $62.41 in the week ending July 3.
The current correction compares favorably to previous major bear cycles in gold's history. As reported by DSP Netra's July 2026 edition, the biggest decline occurred after gold reached its peak in January 1980, with prices plunging 71% and requiring 19 years and 7 months to reach a durable bottom. Similarly, after hitting highs in December 1974, gold corrected 49% in almost a year and eight months. The current cycle, which crossed the 25% drawdown mark within two months of reaching the all-time high, represents one of the fastest corrections historically. According to Mint, the current decline is particularly notable given that gold prices had been rising incrementally for several years until last year, with prices jumping 34% by July 2025 and crossing the psychologically important threshold of ₹1,00,000 per 10 grams in August.
The current correction has been particularly swift compared to historical patterns. According to DSP Netra's analysis, both gold and silver reached the 25% drawdown mark within one to two months after January 2026, contrasting sharply with previous cycles that took months to years. The World Gold Council has indicated potential for gold prices to decline further to $3,500 per ounce by end-2026 if current price consolidation continues. As reported by Mint, the decline is attributed to expectations that the US Federal Reserve will increase interest rates, making US assets more attractive, along with a strong US dollar. Additionally, central banks, which were major buyers until last year, have reduced their pace of gold acquisition. Despite the significant decline, the durable bottom where selling pressure subsides remains uncertain due to the ongoing correction. Mirae Asset notes that traders expect another 0.70 rate hike in April next year, with the Fed looking for 0.96 rate hikes in October, though the ECB is expected to hike in October as well.
Silver prices have experienced a much sharper correction than gold, partly due to the larger euphoria around it last year. According to Mint, silver was rising even faster than gold, with prices adding ₹10,000 within 3-4 days after October 2025, compared to the previous 12-month pace of ₹10,000 per kilogram. The volatility was extreme, with silver losing ₹5,000 per kilogram in some trading sessions. Unlike gold, which has comparatively limited industrial use, silver is utilized in electronic circuit boards and solar panels, making it more sensitive to industrial demand. However, industrial buyers are price-sensitive, and current prices aren't yet low enough to bring in heavy industrial demand. Short-term investors who bought during last year's rush are still holding positions, adding to the volatility. Mirae Asset reports that total known global silver ETF holdings stand at 782.97 MOz, around cycle lows, with holdings declining 2458 tons (9.16%) year-to-date and 1525 tons (5.89%) since the Iran war began on February 28. Registered COMEX inventory has recovered to 93.50 MOz but remains 53.4% down from the record September 2025 peak of 201 MOz.
The recent rollercoaster ride in precious metals underscores the high risk of chasing short-term gains, as reported by Mint. Market experts emphasize that individuals should avoid getting carried away by narratives and check the incentives of those suggesting asset movements. Most individuals are best off allocating 5-10% of their overall portfolio to gold, with a ₹100 investment portfolio with 10% in gold falling only 5% if gold prices are cut in half. Unless there's a particular need for physical commodities, investors are advised to consider gold through financial instruments such as ETFs or mutual funds, which offer better liquidity. While gold prices could still decline further, experts don't expect a crash because price-sensitive central banks may eventually resume buying gold again, though sentiment-driven rallies seem unlikely. Mirae Asset suggests that silver is expected to be highly volatile and choppy in the short run due to evolving Middle East situations, but as the US-Iran conflict is likely to remain contained, traders may buy the dips with appropriate stop-losses, though upside is likely to be capped due to possible rate hikes. A move above $61.20 will open the way to $64, with support at $59/$57.
