Gold prices drop 21% in 20 days; Could Trump-Putin dynamics push rates below ₹1 lakh? | India News

There has been a sharp correction in gold and silver prices in the last 20 days, creating new concerns among both investors and households. Gold, which was close to ₹2 lakh per 10 grams in late January, is now close to ₹1.5 lakh. Market estimates suggest that if the current trend continues, prices may gradually fall below ₹1 lakh by 2027.

In today’s episode of DNA, Zee News Editor-in-Chief Rahul Sinha gave a detailed analysis of the factors that led to this decline and what it means for investors. On the Multi Commodity Exchange (MCX), 10 grams of 24 carat gold fell by around 1% to around ₹ 1,53,000 in the evening session, while in the bullion market, it fell by ₹ 2,242 to around ₹ 1,51,000. On January 29, gold touched ₹1,93,000 in the futures market, marking a decline of ₹40,000 or 21% in just 20 days.

Silver made an even sharper correction. On MCX, prices fell by around 3% to around ₹ 2,32,000 per kilogram. Just 20 days ago, silver had crossed ₹4,20,000 per kilogram, indicating a decline of ₹1,88,000 or about 45%. This pullback follows a strong 2025 in which gold returned nearly 75% and silver rose nearly 170%. However, 2026 started with huge losses for new investors.

The decline is not limited to domestic markets only. Internationally, gold is trading below $5,000 per ounce. One of the main triggers behind the global trend is a report cited by international media, based on internal documents of the Russian government, suggesting that Russia is considering a return to the US dollar-based payment system. Russia has reduced its dependence on the dollar since 2022 following Western sanctions and switched to trading in rubles or common currencies, including the rupee, for trade with India. This de-dollarization trend led many central banks to increase their gold reserves, supporting global prices.

If Russia resumes dollar-denominated trading, demand for dollars could increase, potentially reversing the dollar’s demise. Gold and the dollar often share an inverse relationship; Strong dollar demand generally puts pressure on gold prices. Analysts also suggest that if the use of the dollar increases, central banks may slow down gold purchases or even increase the supply in the market. Additionally, improving relations between Donald Trump and Vladimir Putin could ease geopolitical tensions, reducing demand for safe-haven gold.

The price correction has mixed results. While families planning weddings and jewelry purchases may benefit from lower prices, physical and digital gold investors may face portfolio value erosion. Many who shifted their funds from stocks to precious metals during the rally are now reevaluating their strategies.

Meanwhile, experts point to growing opportunities in industrial metals such as aluminum. Last year, aluminum prices increased by approximately 30-35% due to supply constraints and increasing demand. Production remains energy intensive, with almost a third of costs attributed to electricity. While high energy prices led to the closure of factories in countries such as Australia and Mozambique, China limited production. At the same time, the use of aluminum has become widespread in air conditioning and electric vehicles, as well as in energy storage systems and data centers, with the weight increasing to approximately 200 kilograms per vehicle (50% more than before).

Despite earlier record high prices, India’s appetite for gold imports has remained strong. According to the data of the Ministry of Trade and Industry, gold imports exceeded 12 billion dollars in January, compared to 2.68 billion dollars in January last year. The increase pushed India’s trade deficit to about $35 billion from about $23 billion a year ago, an increase of about 48%, largely driven by higher gold imports.

As volatility in precious metals continues and global macroeconomic factors change, investors are closely watching how currency dynamics, central bank policies and geopolitical developments shape the next phase of the commodity cycle.