Gold takes a healthy breather after record highs; analysts see more correction ahead
After months of relentless gains, gold prices are finally cooling off. Following a sharp rally that lifted the yellow metal from around ₹75,000 to ₹1.30 lakh per 10 grams, a much-anticipated correction has begun — one that experts describe as both “healthy” and “necessary.”
Currently, gold December futures are trading around ₹1.21 lakh per 10 grams, while silver has slipped to ₹1.43 lakh per kg on the Multi Commodity Exchange (MCX) — marking one of the steepest weekly declines in over a decade.
“A correction of 10–15% was on the cards,” said Mahendra Luniya, Chairman of Vighnaharta Gold Ltd. “This would ideally bring prices closer to ₹1.15 lakh per 10 grams — a level that looks more sustainable after the record rally.”
Despite the recent pullback, demand for gold remains firm. Jewellers across India have reported steady buying during the festive season, with expectations of renewed interest ahead of Diwali and the wedding season if prices ease further.
Luniya added that investor confidence in gold remains strong:
“When gold crossed the ₹1 lakh mark, it cemented the faith of Indian investors. Whether it’s jewellery, coins, or digital gold, demand has stayed resilient. If prices dip slightly, we could see even stronger buying momentum.”
Global cues weigh in
Globally, several factors have contributed to the recent dip. The ongoing US government shutdown, uncertainty surrounding Donald Trump’s political influence, and a stronger US dollar have all played a part.
According to Luniya, these developments could push the US Federal Reserve to consider interest rate cuts, which may boost gold demand again:
“Given the global dynamics, I don’t expect gold prices in India to fall below ₹1.15 lakh per 10 grams.”
Meanwhile, profit booking and declining physical demand in Asia have also led to a sharp 6% single-day fall — the steepest in more than ten years.
“The dramatic reversal reflects months of speculative positioning and profit-taking,” said Dr. Renisha Chainani, Head of Research at Augmont. “Yet, the long-term outlook for gold remains positive.”
Silver follows suit
Silver has mirrored gold’s trajectory, but with deeper corrections. Prices have fallen nearly 9% as traders booked profits after recent highs. Higher US bond yields and easing supply worries have also dampened sentiment.
“Silver’s correction is sharper, but its long-term fundamentals remain intact — especially given strong industrial demand from the electric vehicle and solar energy sectors,” Chainani added.
What’s next for investors
Technically, gold is expected to consolidate between ₹1.20 lakh and ₹1.24 lakh per 10 grams in the near term. A breakout on either side could trigger a further 3–4% move. For silver, ₹1.44 lakh per kg is seen as a strong support zone, with ₹1.50 lakh acting as key resistance.
For retail buyers, analysts say this correction may be an opportunity. With the wedding and festive season around the corner, even a modest dip could spark another wave of buying.
“This is a pause, not a reversal,” said Chainani. “The long-term trend for precious metals continues to look strong.”
Disclaimer: The views and recommendations expressed are those of the experts quoted and do not represent the opinions of India Today Group. Investors are advised to consult a certified financial advisor before making investment decisions.
