As of November 2, 2025, gold prices in India have recently corrected after a strong rally earlier in the year, particularly around the Diwali festive season in late October. The price for 24-carat gold stands at about Rs 1,20,770 per 10 grams, down from highs near Rs 1,23,000 per 10 grams just days earlier.
This pullback represents a decline of about 3% in the past week, driven by factors such as profit-booking after record highs, a stronger US dollar, easing US-China trade tensions, firmer bond yields, the end of festive demand, a slightly appreciating rupee, and reduced gold purchases by the Reserve Bank of India (RBI).
Globally, US gold futures have also dropped over 7% in the last week, reflecting similar pressures. Gold prices are influenced by a mix of domestic and global factors.
The global drivers- Economic uncertainty, geopolitical tensions (e.g., ongoing tariff wars under the Trump administration), inflation hedging, central bank buying, and a weaker rupee against the USD, which increases import costs.
Domestic drivers: High demand during festivals and weddings, government policies like import duties and GST, jewellery market trends, and industrial use. Seasonal fluctuations post-Diwali often lead to short-term dips, but broader trends like de-dollarization and financial market risks support long-term appreciation.
Current headwinds: Rising interest rates could make gold less appealing compared to yield-bearing assets, while improved risk sentiment from trade deals might cap upside in the near term.
Analysts expect gold prices to trend upward through 2026, potentially reaching new highs driven by persistent macroeconomic risks and strong investment demand. Projections suggest a steady rise, with estimates pointing to an average increase influenced by RBI rate cuts and global crises, though exact figures vary (e.g., some forecasts indicate prices could climb 10-12% annual. However, short-term volatility is likely.
Gold vs Indian Equities: Long-Term Performance ComparisonFor long-term Indian equity investors, gold serves primarily as an insurance tool rather than a direct competitor.
Gold surged on uncertainty, while equities moderated amid trade talks and earnings growth. It has shown negative correlation with Indian stocks during extreme sell-offs, reducing portfolio drawdowns by 10-20% in crises.
Projections for 2026 favour equities for growth in a recovering economy (e.g., expected earnings uptick in Q3-Q4 2025), but gold could average 10-12% returns if uncertainties persist. So doing a sip in a Multi-Asset fund could be a sensible way to buy gold.
Is It a good time to buy?
Considerations for Long-Term Equity InvestorsThe current price dip could present a buying opportunity for Indian investors, especially those with a long-term horizon, as experts view the pullback as a healthy consolidation rather than a reversal of the bull trend.
Sustained factors like central bank demand, de-dollarization, and geopolitical risks support a positive medium- to long-term outlook.
For long-term equity investors, adding gold (5-15% allocation) enhances diversification, lowers risk-adjusted volatility, and protects against equity downturns—aim for 7.5-15% in a typical 70% equity/30% fixed income portfolio for optimal results. Treat it as an Insurance, not as a great investment.
Entry approach: Use systematic investment plans (SIPs) in gold ETFs or Multi-Asset funds, to average costs amid uncertainty.
I Prefer gold ETFs for liquidity, low costs, and ease over physical gold (which has storage and purity issues).
Rebalancing: If gold exceeds 15% of your portfolio, trim holdings; otherwise, hold and buy dips.
