Diwali, Dhanteras and gold! 10 triggers influencing prices this festive season

As the festive season lights up with Diwali, Dhanteras and Chhath Puja around the corner. Day by day, gold is glittering brighter and silver is sparkling even stronger, truly living up to the festive shine of the season. The more these assets shines, suggests more increases in their value.

Gold has touched a all time high of Rs 1.32 lakh per 10 grams and Silver is racing ahead at Rs 1.68 lakh per kilogram. These surge in prices have left many wondering. Let's understand these 10 points that are influencing asset prices this festive season.

What’s really driving this surge?

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As Religare's report, these factors are influencing market prices :

Demand in festive season

Most of the Indians buy gold and silver as a symbol of wealth and good luck, during Dhanteras and Diwali. It brings security for families. This huge buying brings increase in asset demand, which simultaneously increased its price.

According to the report, Gold annual returns recorded highest in 2025 with 65.75 per cent, and lowest in 2021 with -4.09 per cent.

Rising Global Tensions: From the middle east to the Russia-Ukraine war, have made the investors nervous in 2025. With inflation fears and market uncertainty growing, gold is once again proving itself a safe haven, holding its shine when everything else feels unstable.

On January 25, key indicators signaling world uncertainty above 100,000, highest from January 8 to January, 25.

Central banks policies

With the global growth slowing, many central banks have shifted to dovish policy stance. The U.S. Fed’s recent rate cut by 25 basis points and RBI’s steady Repo rate at 5.5% make gold more appealing, as lower rates reduce the cost of holding it.

This easy-money trend is one big reason gold prices have shot up so high.

Political and fiscal instability

Rising government debt and unsettled financial markets, especially in the US are making investors uneasy.

With markets on edge and currencies under pressure, many are moving towards a safe and stable asset, and here gold performs as a trusted way to protect their money against currency depreciation and market volatility.

Weakening of US dollar

The U.S. dollar has weakened by almost 10% in the first half of 2025 due to global trade uncertainties. A weaker dollar usually lifts gold prices, as it becomes cheaper for foreign buyers.

In India, the rupee has also fallen about 5% this year, making gold imports more expensive and driving local prices higher.

Still, demand stays strong. As for Indians, gold isn’t just an investment, it’s a tradition and a symbol of financial safeguard.

Read also: Could gold hit Rs 1.42 lakh per 10g this festive season?

Inflation

It is giving gold a big boost. Even though U.S. annual CPI inflation has fluctuated between 2.6 per cent and 2.8 per cent in 2025, it’s still above the Fed’s target, keeping investors cautious.

When prices rise and money loses value, at that time gold still holds its value and help people when inflation rises.

Central bank purchase

Central banks around the world are buying gold steadily, showing confidence on gold's long-term value. In 2024, global central purchases exceeded topped 1,000 tonnes for the third year in a row.

Countries like China, reported adding 13 tonnes in Q1 2025 and India continue to add to their holdings of approximately 880 tonnes as late August.

Poland even surpassed the European Central Bank holdings. This strong buying by institutions keeps gold prices supported and proves it’s a reliable store of wealth.

Strong ETF inflows

Gold-backed ETFs are seeing a big comeback in 2025, reflecting investors trust gold more than ever. Global inflows hit $64 billion in 2025, while India’s gold ETFs record $10 billion in September alone.

With markets uncertain and geopolitical tensions high, many are turning to gold ETFs to keep their portfolios safe and balanced in India and other countries.

Investment demands

Yellow metal's demand is lifetime high from investors worldwide. In the first half of 2025, ETFs alone drew 397 tonnes, the highest since the pandemic surge in 2020. While physical gold in bars and coins rose 11 per cent touching 307 tonnes, a 12-year high.

Both financial and physical buying show that people trust gold as a safe, long-term investment.

Technical outlook

Gold has been on a parabolic rally since August 2025, surging from Rs 98,500 per 10 grams to a record Rs 1,26,930 per 10 grams in just two months. The trend remains very strong with consistent higher highs and steady buying from investors.

Prices are comfortably above short-term moving averages, showing no signs of slowing till now, though gold is now in overbought category, so a short-term pause or slight correction is possible.

Any pullback toward key support levels, like the 20-day or 50-day averages, could offer fresh buying opportunities for those looking to ride the uptrend.

Risk Levels

With prices moving sharply, traders should manage risks carefully. Buying the asset on dips around Rs 1,14,000 to Rs 1,18,000 per 10 grams could offer upside toward Rs 1,35,000 to Rs 1,42,000, while a fall below Rs 1,05,000 may signal a deeper correction.