According to the latest market data, gold prices have risen by nearly 14-15% since Dhanteras 2025, with 24-carat gold trading at around ₹1,45,650 per 10 grams in New Delhi as of November 5, 2026, compared with approximately ₹1,32,278 per 10 grams during Dhanteras 2025. As per Mint, this represents an increase of ₹11,000-12,000 per 10 grams over the past year. However, the precious metal has experienced significant volatility, shedding more than 20% from its January peak and falling 12.8% to ₹1.42 lakh per 10 grams on October 31 from ₹1.62 lakh on May 29. Gold had touched approximately ₹1.83 lakh per 10 grams in late January 2026 before correcting nearly 18-20% from that peak. Despite this correction, gold has outperformed both the Nifty and Sensex since last year's Dhanteras, delivering positive returns despite recent price weakness.
A comprehensive analysis of gold investments since 2017 reveals remarkable long-term returns for consistent Dhanteras buyers. An investor who purchased ₹1 lakh worth of 24-carat gold on every Dhanteras from 2017 to 2025 would have accumulated approximately 217.14 grams of gold at the prevailing rates. At the current November 3, 2026 rate of ₹13,812.02 per gram, this investment would be valued at approximately ₹29.99 lakh. The historical price trend shows significant volatility with gold prices increasing by 7.98% between 2017-2018, followed by 19.28% in 2019 and 32.09% in 2020. However, gold prices declined by 5.41% between 2020-2021 before experiencing a sharp 60.32% appreciation between 2024-2025. An investor who started with ₹1 lakh in 2017 would have accumulated approximately 37.41 grams of gold and now holds an investment worth around ₹5.17 lakh, representing returns of approximately 417% over the 10-year period. According to the Motilal Oswal report, the first half of 2026 showed that gold prices were being influenced more by inflation, interest rates and the strength of the dollar than by geopolitical tensions alone, making the return for Dhanteras buyers relatively modest at 5.5% to 7.6%.
The price correction has significantly 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%, as per Rajesh Rokde, Chairman, GJC. Sachin Jain, Regional CEO, India, World Gold Council, noted that the correction has stimulated jewellery demand, with consumers planning weddings over the next three to six months potentially advancing their purchases. According to Mint, gold demand increased 29% quarter-on-quarter in the September quarter in India, with jewellery demand rising 33% sequentially to 100 tonnes, although it remained 20% below the year-ago level. However, the World Gold Council reports that gold demand declined 29% year-on-year to 162.5 tonnes in the July-September quarter amid higher import duty and soaring prices. Despite these mixed signals, institutional interest in gold remains strong, with central banks purchasing a net 321 tonnes globally in the July-September quarter, up 42% year-on-year, and gold ETFs recording inflows of 211 tonnes during the quarter. According to CNBC TV18, 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, but maintains a bullish long-term outlook with a target of ₹1.65 lakh-₹1.80 lakh per 10 grams by next Dhanteras, indicating potential returns of 20-25%.
The latest pressure stems from renewed tensions surrounding the Iran war, which have pushed crude oil prices higher, stoked inflation concerns and strengthened expectations of further US Federal Reserve rate hikes. The Fed has raised interest rates to 3.75%-4% in September, with officials signalling one more hike this year. US consumer prices rose 3.7% year-on-year in September above the forecast of 3.6%, while core inflation came in higher than expected at 2.6%. Jewellery demand has also declined significantly, with World Gold Council data showing a 25% drop in the US, 15% in India and 28% in China during the second quarter. As per The Economic Times, gold prices peaked in January 2026 amid expectations of multiple interest rate cuts by the Federal Reserve, but the outbreak of war involving Iran, the US and Israel triggered a sharp rise in crude oil prices from around $60 to $110 per barrel, fuelling global inflation concerns. This shifted market expectations from rate cuts towards potential rate hikes by central banks, pushing bond yields higher and reducing the appeal of gold, a non-yielding asset. The strong US dollar index has also weighed heavily on gold, with a 4% surge in the dollar index reinforcing the trend that gold typically underperforms when the greenback and bond yields rise.
Central bank activity could add to headwinds, particularly after a period of strong buying earlier this year. BofA highlighted the possibility of central banks turning net sellers amid escalating Middle East tensions, citing Turkey's net gold sales of 82 tonnes and Russia's 56 tonnes through August as examples of this trend. In a note dated October 12, BofA stated that "with the Middle East conflict escalating again, there is a risk that central banks could resume sales." However, The Economic Times reports that annual central bank purchases have remained around 1,000 tonnes in recent years, providing structural support to gold prices. Given the prevailing geopolitical uncertainties, sustained central bank demand could continue to underpin the bullish case for gold in 2027. This structural change may support gold until underlying issues are resolved. Axis Direct noted that 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. For Indian buyers, rupee depreciation is another important factor, as 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.
Nirprendra Yadav from Bonanza advised investors against attempting to call the exact market bottom, recommending staggered buying for those with long-term investment horizons to navigate volatility. For consumers planning to purchase jewellery for Dhanteras or weddings, the correction presents an opportunity to meet requirements. However, financial investors should first assess their existing gold exposure, investment horizon and risk tolerance before increasing holdings. The differing near-term and longer-term forecasts leave investors weighing pressure from inflation and monetary tightening against structural demand for gold over the longer horizon. The Economic Times analysis suggests that current gold prices appear attractive for investors, having corrected more than 20% from their peak, presenting long-term investors who missed the rally with a compelling opportunity to add gold in a staggered manner to their existing portfolios. According to the Motilal Oswal report, gold still holds traditional and long-term value, but its recent performance does not necessarily make it the most rewarding investment option over a one-year period, with returns comparable to fixed deposits and other fixed-income investments. Axis Direct has recommended staggered accumulation rather than investing the entire amount at once, as gold prices remain sensitive to interest rate expectations, currency movements and geopolitical developments. As per Mint, investors should ensure that purchases are not made just by chasing recent price movements, with the decision to invest in gold depending entirely on long-term financial planning amid ongoing geopolitical tensions.
