Indian Precious Metals Market Update – Silver Volatility and Platinum Jewellery Outlook for 2026
Indian Precious Metals Market at a Turning Point
The Indian precious metals market entered 2026 on a highly volatile note, with sharp movements in silver prices, sustained strength in gold, and a steady outlook for platinum jewellery demand. January 2026 proved to be a critical month, highlighting both the opportunities and risks faced by investors, traders, and the jewellery industry. This article explores recent developments in silver, gold, and platinum in India, based on the latest India Focus Monthly report.
Silver Market: From Record Highs to Sudden Correction
Silver prices in India witnessed an extraordinary rally toward the end of 2025 and early January 2026, reaching an all-time high of around ₹4,20,000 per kg on 29 January. However, this rally was short-lived. Within just three trading sessions, prices corrected sharply by over 45%, falling to nearly ₹2,50,000 per kg.
This dramatic decline was triggered by a combination of global and domestic factors. A broad sell-off in international markets, coupled with movements in the US dollar following the nomination of a new US Federal Reserve Governor, intensified volatility. These sudden price swings created significant uncertainty among Indian investors and traders.
Impact on Investment Demand and Market Liquidity
During the bullish phase of 2025, retail investment demand for silver was exceptionally strong. With jewellery and silverware demand already under pressure due to elevated prices, coins, bars, and exchange-traded products (ETPs) became the preferred investment avenues.
In 2025:
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Indian silver coin and bar demand rose 26% year-on-year to nearly 2,300 tonnes, the highest level in three years.
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Silver ETP holdings surged by 2,284 tonnes, taking total holdings to over 3,600 tonnes, despite these products being introduced only in 2022.
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In contrast, combined silverware and jewellery fabrication declined by 15%, reflecting price sensitivity among consumers.
However, the sharp correction in January 2026 reversed sentiment. On the Multi Commodity Exchange (MCX), silver prices hit the lower circuit limit of 27%, triggering panic selling. Margin calls forced many investors to liquidate positions, worsening the sell-off.
Physical Market Stress and Wide Bid-Ask Spreads
The physical silver market in India became severely illiquid during the correction phase. Traders and bullion dealers showed reluctance to buy back silver from consumers, even at reduced prices. Where buying did occur, it was often at steep discounts of 5–10%, while selling premiums ranged between 5–7%.
This resulted in unusually wide bid-ask spreads, preventing smooth price discovery and restricting investors’ ability to book profits. The situation was further aggravated by speculation around a possible import duty hike ahead of the Union Budget. Although no duty changes were announced, earlier expectations had already pushed up premiums, which later unwound rapidly.
Memories of the 2011 silver price collapse, after which prices took nearly a decade to recover, also weighed heavily on investor psychology. Fears of a repeat scenario encouraged further liquidation, even at unfavourable prices.
Gold Market: Sustained Strength Amid Volatility
While silver experienced turbulence, gold continued to demonstrate resilience. Domestic gold prices touched a record high of around ₹1,80,779 per 10 grams on 29 January, before stabilising near ₹1,50,000. Indian gold ETPs recorded a monthly inflow of 8.6 tonnes in December, taking total holdings to 95 tonnes by the end of 2025, underlining strong investor confidence in gold as a safe-haven asset.
Platinum Jewellery: Stable and Promising Outlook for 2026
Platinum jewellery demand in India has emerged as a structural growth story. Since the pandemic, demand has almost doubled, rising from 3.9 tonnes in 2021 to 7.5 tonnes in 2025. This growth has been driven by:
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Expansion of organised retail chains
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Deeper penetration into tier-2 and tier-3 cities
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Growing preference among younger consumers for platinum’s modern appeal and lower price compared to gold
Exports supported fabrication growth in 2023 and 2024, especially to the US, Europe, and the Middle East. However, higher US tariffs and normalisation of exports to the UAE led to a 10% decline in fabrication during 2025.
Looking ahead to 2026, platinum jewellery demand is expected to remain stable:
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Fabrication is forecast to rise marginally by 2% to 7.6 tonnes
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Rising gold prices are prompting jewellers to reduce gold content and increase platinum usage, particularly in bi-metal jewellery
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Wedding rings and men’s jewellery continue to be key demand drivers
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Lightweight studded jewellery is gaining popularity among budget-conscious consumers
The primary risks to this outlook include export uncertainty, particularly due to unclear tariff structures in the US, and potential price volatility in both gold and platinum.
Conclusion: Confidence Shaken but Long-Term Fundamentals Intact
The sharp correction in silver prices has shaken retail investor confidence and exposed liquidity challenges in the physical market. While speculative excesses have eased, sentiment is likely to remain under pressure until volatility subsides and trading conditions normalise.
At the same time, gold continues to attract strong investment flows, and platinum jewellery is steadily strengthening its position in India’s jewellery market. Overall, despite short-term turbulence, the long-term fundamentals for precious metals in India remain broadly supportive, with evolving consumer preferences and investment behaviour shaping the market’s next phase.
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