Gold rate today: Gold prices have correction of more than 26% from its January peak of $5,595/oz to around $4,100 has been one of its sharpest drawdowns in recent years, but the decline has unfolded in distinct stages rather than as a single, uninterrupted move.
Market analysts believe that this downturn has made valuations relatively more attractive, with prices now around $4,136/oz and MCX gold trading below the ₹1.50 lakh mark.
According to Kaynat Chainwala, AVP – Commodity Research, Kotak Securities, the metal surrendered a significant portion of its January gains over the following months before staging a recovery toward $4,700 by late August.
“The subsequent decline provides a clearer read on the changing macro drivers. Gold fell from around $4,700 to approximately $4,250 by mid-September, losing nearly 10% in less than three weeks ahead of the FOMC meeting, as a series of firmer-than-expected inflation readings pushed Fed hike expectations close to 90%,” Chainwala said.
What’s weighing on gold prices?
The recent decline has been driven primarily by higher US Treasury yields and a firmer dollar, along with changing geopolitical expectations, while rupee movements are also influencing domestic prices.
Tata Mutual Fund, in its report titled ‘Gold and Silver Outlook’, said that the more important observation is that despite these headwinds, the structural drivers that pushed gold higher over the last three years remain intact.
These are backed by continued support from central bank buying, fiscal concerns, geopolitical uncertainty and reserve diversification trends.
Should you buy gold ahead of Diwali?
Kaveri More, Commodity Technical Analyst at Choice Broking, said that the correction in gold prices appears more like a phase of consolidation and repricing rather than a reason to rush into lump-sum buying.
More further explained that ahead of Diwali, investors should avoid trying to identify the exact bottom and instead consider staggered buying over the next few weeks, preferably in 3–4 tranches.
“For festive or jewellery requirements, buyers can purchase according to their needs, while for investment purposes, Gold ETFs can offer greater flexibility and avoid jewellery-making charges. At the same time, gold may remain volatile and could see further downside before stabilising, with support seen around $3,950/oz. Investors should therefore maintain a sensible allocation to gold and avoid deploying funds that may be required for short-term expenses,” More said.
On the other hand, Tata Mutual Fund said that for investors who missed the earlier rally, current levels offer a significantly better entry point than at the start of the year, while the medium-term outlook continues to be supported by central bank demand, fiscal risks and geopolitical uncertainty.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
