By Surabi Karthik

President, South India Bullion Association (SIBA)

This Diwali season, our industry is facing a market that does not follow the old rules. Prices are falling, sales are falling, and the usual signals no longer work. Here is my honest reading of where we stand and what we must do.

1. The numbers

– Gold (24K, 10g): Peaked near Rs 1.79 lakh in January 2026. Around Rs 1.42 lakh by end of October. That’s about 20% down from the peak.

– Silver (1 kg): Rs 2.55 lakh in September. Around Rs 1.87 lakh by end of October. That’s about 27% down, with nearly 17% of that fall in a single month.

– Festive sales: 2025 Diwali saw about Rs 85,000 crore in gold jewellery sales. This year we expect about 50% lower.

– Demand shift: In April to June 2026, India’s jewellery demand fell 15% to 75 tonnes, while bar and coin demand rose 9% to 50 tonnes. Customers are moving from jewellery to investment gold.

2. Speculation has become operation

Earlier, gold and silver moved within a range. They went up to a level, came back, and gave regular entry and exit points. Demand, supply and investment set the price.

That is gone. Today the market runs in operational mode. A few large, unseen players push it in one direction. When it is bullish, it rises without a pause. When it is bearish, it falls without a pause. There is no breathing space in between.

3. Calculation no longer works

Earlier we could calculate. News, data, geopolitics and sentiment all worked on facts, so even our losses made sense.

Now the same inputs give different results. Earlier, war news meant gold went up. Today war news comes and gold falls. When calculation itself fails, speculation is far more dangerous.

4. News and sentiment are being manufactured

At the top of a bull run, “it will go higher” stories flood the market. Everyone enters, and that is exactly when the reversal comes. Do not trade on headlines.

5. The MCX and COMEX gap is a trap

On the way up, MCX runs faster than COMEX. On the way down, MCX slips to a discount. So spot is high and MCX is low, and at that moment selling on MCX to hedge feels wrong and causes a loss. This gap is part of the setup.

6. Hedging is not automatic safety

Parity changes every day. A hedge done blindly can hurt as much as no hedge. Check parity before every hedge.

7. Watch the gold-silver ratio

The ratio is now around 1:76 to 1:78. We have seen 1:100 and even 1:110. Stand on the wrong side and the loss can reach 35%. Stand on the right side and you exit with a small profit. The upside is small and the downside is big, so size your positions with that in mind.

8. Our own habit is our biggest risk

When we are in profit, we book early on thin margins. When we are in loss, we hold and keep adding, hoping it will “average out.” That habit is the hole that sinks the ship.

What traders must do now

• Cut losses fast and let profits run.
• Never take positions beyond your capacity.
• Keep inventory lean. A falling market erodes stock value every day.
• Push exchange business. Falling prices bring more old gold to the counter.
• Focus on lightweight and affordable designs. The customer has not left, but their budget has shrunk.
• Do not dismiss online micro-gold buying. Customers now invest ₹100 or ₹1,000 at a time online, and that is our future customer.
• Stay dynamic. Old market rules will not save us.

Our ask to the Government

– Reduce imports for pure investment: If bar and coin buying is discouraged, India can save about 200 tonnes of imports a year and ease pressure on foreign exchange.

– Fix GST issues in bullion trade: Honest, fully compliant traders must be protected, not put at a disadvantage.

Conclusion:

I’m not saying this to create fear. I’m saying it because I care about our fraternity. Our business is what feeds our families and carries our name. Let us not turn it into gambling. Stay alert, stay disciplined, stay safe.