Gold Prices Drop: Is It Time to Buy or Sell? Experts Weigh In
After months of steady highs, gold prices have seen a notable dip in both domestic and global markets. The correction has left investors wondering — is this the right time to buy more gold, or should one book profits and wait for further decline?
Here’s what experts and market trends suggest.
What’s Behind the Recent Price Drop?
Analysts attribute the recent fall in gold prices to several macroeconomic factors:
Strengthening US dollar and rising bond yields have reduced gold’s appeal as a safe-haven asset.
Expectations of future rate cuts by the US Federal Reserve have created short-term volatility.
Profit booking by large investors after record highs earlier this year.
In India, prices followed the international trend, with 24-carat gold sliding by ₹500–₹800 per 10 grams in major cities.
Expert Opinions: Buy or Wait?
Bullish View — A Buying Opportunity
Many analysts believe this dip offers a good entry point for long-term investors.
“Gold remains a strong hedge against inflation and global uncertainty,” says a Mumbai-based commodities strategist. “Buying in phases during corrections is a prudent strategy.”
They expect gold to trade in the range of ₹68,000–₹70,000 per 10 grams by early 2026, supported by central bank buying and continued geopolitical risks.
Bearish View — More Downside Possible
Some experts caution that the metal could see further short-term weakness before stabilizing.
“If the US economy continues to strengthen and interest rates remain high, gold may face headwinds,” says another analyst.
Traders are advised to avoid aggressive buying until prices find stronger support levels around ₹60,000–₹61,000 per 10 grams.
What Should Retail Investors Do?
For long-term holders (3+ years): Accumulate gradually through SIPs in gold ETFs or sovereign gold bonds.
For short-term traders: Wait for clearer trend confirmation — avoid leveraged positions during volatility.
For portfolio diversification: Keep gold allocation between 5–10% of total investments for risk balance.
Global Context
Globally, spot gold is hovering around US$2,280 per ounce, down nearly 3% from recent peaks. The World Gold Council notes continued buying by central banks in Asia, indicating that institutional demand remains resilient.
Outlook for 2025–26
Experts expect gold to remain range-bound in the short term but bullish over the medium term, given ongoing inflation pressures, currency uncertainty, and election-related volatility in several economies.
FAQs
1. Why are gold prices falling now?
Because of a stronger dollar, profit booking, and shifting expectations about US interest rate cuts.
2. Is this a good time to buy gold?
If you’re investing for the long term, yes — gradual accumulation is advisable during dips.
3. What’s the best way to invest in gold?
Gold ETFs, Sovereign Gold Bonds (SGBs), or digital gold are safer and more liquid options than physical gold.
4. Could prices fall further?
Short-term volatility is possible, but fundamentals remain supportive in the medium term.
5. What percentage of my portfolio should be in gold?
Experts recommend 5–10%, depending on your risk profile.
Published on : 30th October
Published by : SMITA
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