Dhanteras is considered one of the most auspicious occasions to buy gold. This year, however, investors are approaching the festive season amid a sharp correction in the yellow metal. Domestic gold prices are hovering around ₹1,42,000 per 10 grams, down more than 20% from their peak of nearly ₹1,80,000.
Geopolitical tensions in the Middle East, a stronger US dollar and elevated interest rates have weighed on gold prices, raising questions about the sustainability of the metal’s long-term bull run. However, continued central bank purchases and sustained inflows into gold exchange-traded funds (ETFs) could support the outlook, according to an Axis Direct report.
Despite the recent correction, gold has delivered a return of nearly 8% since last Dhanteras, significantly outperforming the Nifty 50, the report noted. The recent decline could therefore offer investors an opportunity to reassess their gold allocation as they look to make fresh investments during the festive season.
Gold ETF inflows remain strong despite price correction
Investor interest in gold ETFs has remained resilient despite volatility in prices. Gold ETFs attracted approximately $89 billion in inflows in 2025, compared with $3.4 billion in 2024, reinforcing the metal’s appeal as a safe-haven asset amid global economic and geopolitical uncertainty.
The trend continued in 2026, with gold ETF inflows reaching approximately $39 billion through September. Sustained inflows, even when gold prices were elevated, indicate continued investor interest and could provide further support to bullion, Axis Direct said in its report.
Domestic investors have also increased their exposure to gold ETFs. According to analysts, these funds attracted estimated net investments of around ₹3,300 crore in October.
The consolidation in gold prices has coincided with a steady expansion in assets under management (AUM) of gold ETFs. Total AUM increased from approximately ₹1,58,400 crore in April 2026 to ₹1,91,000 crore in October, indicating growing investor participation despite the recent correction.
How have gold ETFs performed ahead of Dhanteras 2026?
Gold ETFs have delivered positive returns over longer periods, although recent price weakness has affected their near-term performance.
Since Diwali 2025, celebrated on 20 October, gold ETFs have delivered an average return of 9.22%, with 22 schemes included in the comparison. Nippon India Gold ETF BeES led the one-year performance table with returns of 12.58%, followed by Invesco Gold ETF at 12.50% and ICICI Gold ETF at 12.39%.
Separately, Value Research data showed that the gold ETFs or funds category delivered returns of 6.94% year-to-date, 18.64% over one year, 31.90% over three years and 23.15% over five years, as of 26 October 2026.
However, the recent correction has been broad-based. All 25 schemes listed on Dhan’s gold ETF page recorded negative returns over the past month as of 4 November. One-month losses ranged from 3.66% to 4.53%, with Zerodha Gold ETF declining 4.53%, followed by Mirae Asset Gold ETF at 4.47% and UTI Gold ETF at 4.41%.
The three-month performance was relatively less severe, with returns ranging from a decline of 0.04% for Invesco India Gold ETF to 0.90% for LIC Gold ETF. Among the larger schemes, Nippon Gold ETF fell 4.13% over one month and 0.63% over three months, while ICICI Prudential Gold ETF declined 3.92% and 0.40%, respectively.
What is the outlook for gold prices?
In its latest quarterly outlook, the World Gold Council said the ongoing festive and wedding seasons are expected to support gold demand. Continued purchases by central banks, which have been adding to their reserves at historically elevated levels, could also provide support to prices over the next 12 months.
Pankaj Mathpal, Founder and CEO of Optima Money, said the outlook for gold remains positive, supported by strong investment demand and expectations of a modest decline in overall supply. However, higher interest rates, rising bond yields and a stronger US dollar could trigger volatility in prices.
“From an investor’s perspective, this is not the time to chase gold prices or make large lump-sum investments. Investors may consider accumulating gold in small quantities through Gold ETFs, keeping in mind their existing portfolio allocation, exposure to gold and long-term financial goals,” Mathpal said.
He added that gold should primarily serve as a portfolio diversifier and a hedge against uncertainty rather than an instrument for short-term speculation.
Technical outlook: Key levels to watch
According to Axis Direct, MCX gold faced strong resistance near ₹1,60,000, which gradually turned into a supply zone as prices repeatedly failed to sustain above that level over the past seven months.
A weekly close below the 20-week exponential moving average (EMA) in September further weakened the bullish technical outlook. On the international front, COMEX gold settled below $3,900 on the weekly chart for the first time in a year, adding to the pressure on market sentiment.
Gold’s Dhanteras performance: What could investors expect?
Despite the recent correction, gold has delivered extraordinary returns over the longer term. According to Axis Direct, the metal generated an absolute return of nearly 200% over the five years from Dhanteras 2021 to the run-up to Dhanteras 2026.
Domestic gold prices climbed from approximately ₹47,600 per 10 grams in November 2021 to around ₹1,42,750 in late October 2026, translating into a compound annual growth rate (CAGR) of 24.53%.
Axis Direct believes the correction of more than 20% from the peak could offer long-term investors who missed the earlier rally an opportunity to build exposure to gold gradually.
The brokerage expects some volatility in the near term, particularly if interest rates remain elevated. However, if favourable developments materialise, it expects gold to deliver returns of approximately 20–25% by next Dhanteras, with a target price range of ₹1,65,000– ₹1,71,000.
For investors considering gold this Dhanteras, the recent decline may make staggered accumulation more attractive than chasing prices through a large one-time investment. The key, experts suggest, is to treat gold as a long-term portfolio diversifier and maintain an allocation aligned with individual financial goals.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
