When GoodReturns reported a sudden bounce in gold prices on October 25, 2025, investors breathed a collective sigh of relief. The rally kicked off as the Chhath PujaIndia festivities began across the sub‑continent, pulling demand back into the market after a six‑day slide that saw 100 grams of 24‑carat gold plunge an eye‑watering Rs 84,000. In the south, traders in Chennai posted the highest city‑wide rate at Rs 12,562 per gram, while Delhi and Mumbai nudged just a few rupees higher.
Festival Demand Fuels a Gold Rally
The cultural significance of Chhath Puja—an occasion where families traditionally offer gold‑laden poojas to the sun god—means buying spikes right before the holiday. Retailers in Bihar, Jharkhand and Uttar Pradesh reported queues stretching outside jewelry stores, a pattern mirrored in metros where affluent buyers stock up for both gifting and investment. As a result, 10‑gram 24‑carat gold jumped Rs 1,250 to Rs 1,25,620, and the 100‑gram bar surged Rs 12,500, landing at Rs 12,56,200. That’s roughly a 2 % gain in a single session, enough to erase most of the week’s losses.
Day‑by‑Day Price Volatility Since Diwali
The slide began on October 18, right after the Diwali shopping frenzy. That day the 100‑gram price fell Rs 19,100. The next day, October 19, the market barely moved, a brief lull that many hoped would be the start of a recovery. Instead, October 20 saw another Rs 1,700 dip, followed by Rs 1,100 on the 21st. The real shock came on October 22, when the metal crashed Rs 46,900—a drop that left analysts scrambling for explanations. Subsequent days added Rs 8,100 (Oct 23) and Rs 7,100 (Oct 24) more losses, tallying the Rs 84,000 plunge.
What the Numbers Say: City‑wise Rates
Across the country, the rebound wasn’t uniform. Moneycontrol—part of Network18 Media & Investments Limited—noted that on October 24 the per‑gram rates were Rs 12,507 for 24‑karat, Rs 11,464 for 22‑karat and Rs 9,380 for 18‑karat, each barely down Rs 1 from the previous day. By contrast, Mathrubhumi reported on October 25 a slightly higher 24‑karat rate of Rs 12,436 per gram nationwide, with Chennai matching that figure, Delhi edging to Rs 12,451, and Mumbai, Kolkata, Bengaluru and Hyderabad staying close to the national average.
Analysts Weigh In: Profit‑Taking vs. Festive Buying
"After a 50 % year‑to‑date rally, profit‑booking was inevitable," said Rajat Sharma, senior analyst at LKP Securities. "The sharp dip from October 18 to 24 mirrors what we saw after the 2022 gold rally—sharp corrections followed by a festive bounce." Sharma added that the strength of the Indian rupee against the dollar this week helped cushion the fall, even as the dollar index climbed. GoodReturns echoed the sentiment, pointing out that domestic demand during the festival season traditionally outweighs short‑term global weakness.
Global forces weren’t idle either. Spot gold slipped 0.2 % to $4,118 per ounce, according to Mathrubhumi, while Goldprice.org logged a 0.74 % rise to $4,120—still below the $4,300 ceiling seen three weeks earlier. The Federal Reserve is slated to announce its next policy decision in early November, a move that could either sharpen the dollar further or provide a sigh of relief for gold traders.
Looking Ahead: Fed Decision and Global Trends
Market watchers say the next few weeks will hinge on three variables: the outcome of the Fed meeting, any breakthrough in US‑China trade talks, and the depth of domestic festival demand. If the Fed signals a pause or cut, the dollar could ease, giving gold a fresh push. Conversely, a hawkish stance may keep pressure on the metal, especially if US inflation data stay stubbornly high.
In the short term, analysts expect gold to trade in a relatively tight band—around Rs 12,500 for 24‑karat gold—until the festive season wanes around the end of November. Still, the metal remains an inflation hedge, and with household savings still tilted toward tangible assets, many investors view the recent volatility as a buying opportunity rather than a warning sign.
Key Facts
- Gold prices rebounded on Oct 25, 2025 as Chhath Puja began.
- 100‑gram 24‑carat gold rose Rs 12,500 to Rs 12,56,200.
- Six‑day decline (Oct 18‑24) totaled Rs 84,000 per 100 grams.
- Spot gold hovered around $4,120 per ounce, down 0.2 % from the previous day.
- Analyst Rajat Sharma predicts a limited trading range pending the Federal Reserve decision.
Frequently Asked Questions
Why did gold prices crash before the Chhath Puja rally?
The sharp drop from October 18‑24 was driven by profit‑taking after a 50 % annual rally, a strengthening US dollar and anticipation of a Federal Reserve rate move. Combined, these factors outweighed the usual festive buying pressure—until the holiday itself revived demand.
Which Indian city saw the highest gold price on October 25?
Chennai reported the peak 24‑karat rate of Rs 12,562 per gram, marginally ahead of Delhi’s Rs 12,451 and the national average of Rs 12,436.
How do global gold trends affect Indian prices?
International spot prices set the baseline for Indian rates. A 0.2 % dip to $4,118 per ounce kept domestic prices from falling further, as the rupee‑denominated rates still reflect global supply‑demand dynamics and currency movements.
What could cause gold prices to rise after the festival season?
A dovish stance from the Federal Reserve, weakening of the US dollar, or fresh geopolitical tensions could all spur investors toward gold as a safe‑haven, pushing Indian rates higher even after festival demand eases.
Is now a good time to buy gold for investment?
Many analysts, including Rajat Sharma of LKP Securities, argue that the recent volatility creates entry points. With inflation concerns and limited safe‑haven alternatives, gold remains attractive, especially for investors looking to hedge currency risk.