Gold, Silver Correction May Fuel 15%-35% Rally by Next Dhanteras

Precious Metals’ Pullback Puts Festive Buying and Recovery Targets in Focus

A steep retreat from record levels has reset expectations for gold and silver, though analysts see scope for a recovery over the coming year.

A steep correction changes the festive-season equation

Gold is trading at about ₹1,42,000 per 10 grams, around 20% below its all-time high of roughly ₹1,80,000 hit in late January. Silver has corrected more sharply, falling to ₹1,87,000 per kg from above ₹4,00,000 around the same period. The declines have brought both metals back into focus for buyers considering Dhanteras purchases and for investors assessing whether prices have room to recover.

The correction has not erased all recent gains. Historical spot-market data available on MCX shows gold up 8% year to date and 10% from last Dhanteras, using data from October 17, 2025. Silver was up 9.5% from last Dhanteras but down 18% year to date. These different timeframes underline how quickly returns can shift in a volatile market.

Macro pressure remains the near-term hurdle

Sticky inflation, higher yields linked to a crude-oil price spike and renewed expectations of Federal Reserve tightening have weighed on precious metals. Because gold does not provide an income stream, elevated bond yields can make it less attractive by comparison. Further rate-hike expectations could therefore keep prices unsettled, even if the longer-term case remains intact.

The outlook could change if inflation moderates and the Fed shifts to rate cuts in 2027, as described in the source outlook. Lower bond yields and a weaker dollar could then support gold, while renewed investment demand may add to that support. These are possible drivers, not a guarantee of a near-term rebound.

Structural demand supports the longer-term case

Analysts point to geopolitical uncertainty, central-bank diversification, constrained supply and investment demand as longer-term supports. Annual central-bank gold purchases have remained around 1,000 tonnes in recent years. Motilal Oswal Financial Services views gold as the more defensive option, while silver may offer greater upside leverage alongside significantly higher volatility.

Monarch Networth Capital has characterised the sharp correction as technical deleveraging within an ongoing bull cycle rather than a fundamental reversal. That is one interpretation of the sell-off, not a settled outcome. Motilal Oswal also notes that pre-Diwali performance has outpaced post-Diwali returns in most of the past 10 years, while stressing that global macro conditions ultimately shape the scale of returns.

Targets are attractive, but not risk-free

Motilal Oswal’s suggested gold buying range is ₹1,41,000–₹1,43,000, with a 12-month target of ₹1,68,000, implying about 16% upside. For silver, it gives a buying range of ₹1,72,000–₹1,75,000 and a target of ₹2,55,000, equivalent to a projected gain of 36% from the last close. Axis Direct expects gold to rise 18% by next Dhanteras. Analysts also warn that a further 2–3% correction cannot be ruled out.

Investors can access bullion through exchange-traded funds or physical purchases. Experts cited in the report favour considering both, rather than relying on a single route. The choice depends on an investor’s intended exposure and preferences; the key point is that a price target does not remove the risk of losses during a volatile period.

Key Highlights

• Gold is about 20% below its late-January peak; silver has fallen to ₹1,87,000 per kg from above ₹4,00,000.
• Inflation concerns, elevated yields and Fed tightening expectations remain near-term headwinds.
• Central-bank buying and investment demand are among the structural supports cited for gold.
• Motilal Oswal’s targets imply about 16% upside for gold and 36% for silver from the stated reference points.
• Silver offers potentially greater upside, but analysts describe it as significantly more volatile than gold.

Investor Note: The correction may create an entry opportunity for investors with a long horizon, but analyst targets are estimates, not assured returns. Consider the possibility of further volatility, particularly in silver, and choose an exposure that fits your risk tolerance.