With Dhanteras falling on November 6, gold prices are in focus after correcting sharply from their 2026 peak. The decline has brought prices off record highs, raising the question of whether this could be an opportunity for investors looking to add gold to their portfolios.
However, the outlook remains mixed, with near-term pressure from elevated interest rates and a strong US dollar competing with longer-term support from central bank purchases and investment demand.
Gold prices fell 12.8%, or ₹20,900, to ₹1.42 lakh per 10 grams on October 31 from ₹1.62 lakh on May 29. The metal was trading at ₹1.46 lakh per 10 grams on November 4, according to industry data cited by PTI.
The price correction has also improved consumer sentiment ahead of the festive season. The All India Gem and Jewellery Domestic Council (GJC) expects jewellery sales to remain flat in volume terms this festive season, while sales value could increase by 20-30%, Rajesh Rokde, Chairman, GJC, told PTI.
Sachin Jain, Regional CEO, India, World Gold Council, said the correction has stimulated jewellery demand, with consumers planning weddings over the next three to six months potentially advancing their purchases.
Gold outlook: What returns could investors expect by next Dhanteras?
In its November 4 report, Axis Direct said domestic gold prices had corrected more than 22% from their 2026 peak of around ₹1.80 lakh per 10 grams.
The correction has been driven by higher crude oil prices, inflation concerns, expectations of further US Federal Reserve rate hikes and a stronger dollar.
Higher interest rates generally weigh on gold, as the non-yielding asset becomes less attractive compared with interest-bearing investments.
Deveya Gaglani, Senior Research Analyst – Commodities, Axis Direct, expects gold to remain under pressure in the near term, with international prices potentially testing support levels of $3,700 and $3,600.
However, the brokerage maintains a bullish long-term outlook, with a target of ₹1.65 lakh-₹1.80 lakh per 10 grams by next Dhanteras. It has also indicated potential returns of 20-25%, with a target range of ₹1.65 lakh-₹1.71 lakh per 10 grams.
What could drive gold prices higher?
A possible easing of geopolitical tensions and a shift towards interest rate cuts could support gold prices, Axis Direct said. A lasting ceasefire between the US and Iran could ease crude oil supply concerns, moderate inflation and reduce pressure on bond yields and the dollar.
Central bank purchases and gold ETF inflows are other factors supporting the longer-term outlook. Axis Direct said central banks have maintained annual gold purchases of around 1,000 tonnes in recent years, while global gold ETF inflows reached approximately $39 billion through September 2026.
Tapan Patel, Fund Manager – Commodities, Tata Asset Management, said concerns around global economic growth, central bank diversification and risks associated with US fiscal conditions could provide structural support to gold and silver.
He also highlighted the role of commodities in portfolio diversification amid geopolitical uncertainty, trade tensions and changing weather patterns.
For Indian buyers, rupee depreciation is another important factor. Since India imports most of its gold requirements and international prices are denominated in dollars, a weaker rupee raises the domestic cost of gold and can cushion the impact of a correction in global prices.
For investors looking to add gold to their portfolios, Axis Direct has recommended staggered accumulation rather than investing the entire amount at once. Gold prices, however, remain sensitive to interest rate expectations, currency movements and geopolitical developments.
The brokerage’s price targets are projections, not assured returns.
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Disclaimer: This article is for informational purposes only and should not be construed as investment advice. Readers should consult certified experts before making any investment decisions.