Topic 5: BULLION

Gold and silver prices in India remained elevated through most of December 2025, supported by a mix of global safe-haven demand, currency effects and central bank buying, before correcting sharply in the final days of the month as profit-taking and year-end rebalancing set in. Domestic 24K gold traded comfortably above the ₹14,000 per gram mark for much of the last week of December, touching highs near ₹14,242 per gram on December 27–29, but momentum faded quickly thereafter. Prices fell to around ₹13,620 on December 30 and settled near ₹13,588 by December 31, marking a steep decline of about 4.5% in the final stretch of the month. Correspondingly, 22K gold ended December near ₹12,455 per gram and 18K around ₹10,191. Silver followed a similar pattern, rising earlier in the month on safe-haven inflows before softening toward the end as risk appetite improved in equities and speculative positions were unwound
The late-month correction was primarily driven by aggressive profit-booking after a strong rally. Gold had posted substantial gains earlier in the year, leaving prices technically overbought, with momentum indicators such as the relative strength index moving above 70. This prompted traders and investors to lock in profits, especially as the calendar year drew to a close. In India, physical demand also tapered after the Diwali and wedding-season peak, reducing support from jewellery buying and encouraging dealers and investors to offload holdings as part of tax planning and portfolio rebalancing. Similar dynamics were visible globally, where COMEX data showed speculators trimming long positions after year-to-date gains of more than 25%, reinforcing the downward pressure into month-end. Despite the correction, gold’s broader tone in December remained resilient, underpinned by geopolitical and macroeconomic uncertainties. Early in the month, heightened tensions in the Middle East, continued risks around the Russia–Ukraine conflict, and intermittent friction involving Venezuela and US sanctions injected a risk premium into bullion prices, briefly pushing global spot gold above USD 4,400 per ounce. These developments supported safe-haven flows into gold-backed ETFs and sustained central bank interest. Global spot prices, while volatile, still ended December up around 3% on a monthly basis, easing from late-month highs to about USD 4,330 per ounce by early January 2026.
Currency movements played a critical role in shaping domestic prices. The sharp depreciation of the Indian rupee toward ₹90.8 per US dollar amplified local gold prices through most of December, effectively adding an import premium even when global prices softened. This currency effect helped insulate Indian gold prices from sharper declines earlier in the month. However, strength in the US dollar, with the dollar index holding above 108, capped international gains and eventually contributed to the late-month pullback in ounce-denominated prices. Falling crude oil prices helped ease import costs but were insufficient to offset the combined impact of profit-taking and stronger dollar dynamics. Central bank buying remained a structural support. Ongoing purchases by the RBI and other major central banks, including China, reinforced gold’s role as a long-term store of value amid de-dollarization trends and geopolitical uncertainty, even as short-term momentum faded. Overall, December 2025 for gold and silver was characterized by a classic pattern of early resilience followed by a sharp technical correction, leaving bullion prices lower at the margin but still elevated in a broader historical and strategic context heading into 2026.