Gold prices have experienced a 25% correction from their January 2026 peak, creating an attractive entry point ahead of Dhanteras. International gold prices touched a record high of close to $5,600 per ounce in late January 2026, but by October 16, spot gold stood at about $4,179, representing a significant decline. According to CNBC TV18, this correction has made gold more attractive for investors, with easing US Treasury yields and continued central bank buying providing strong fundamentals for investment. ASSOCHAM estimated in April 2026 that Indian households hold nearly $5 trillion of gold, more than the top ten central banks combined, highlighting gold's deep integration into India's savings culture.
The primary driver of gold's decline was rising US Treasury yields, with the 10-year yield reaching 5.31% by October 5, 2026, up from 4.24% when gold peaked in late January. The 10-year inflation-protected yield had reached 2.92%, close to its 2008 record, creating the highest holding cost in nearly two decades for the non-yielding asset. However, relief emerged in the week ending October 16, with the 10-year yield touching 5.33% and falling to about 5.09%, its largest weekly decline in more than a year, despite hotter than expected US inflation of 3.7% for September. As per CNBC TV18, every easing in real yields lowers the cost of holding gold.
Despite the price decline, central banks bought a net 289 tonnes of gold in the second quarter of 2026, a record for a second quarter, led by Poland and China. The World Gold Council still expects another strong year of official demand, while in India, gold ETFs drew ₹4,451 crore of net inflows in September, taking the year-to-date total past all of 2025. According to CNBC TV18, the buyers with the longest horizons have not left, with global Indians now having additional access through GIFT City's India International Bullion Exchange (IIBX), which trades London Bullion Market Association standard gold at international dollar prices with metal held in insured vaults.
According to reports from Business Standard, gold purchases during Dhanteras should focus on purity verification over design appeal. A wrong purity claim, misleading weight, or unexplained charges can turn a festival purchase into an expensive mistake. Buyers should check the Bureau of Indian Standards (BIS) hallmark and verify the six-character Hallmark Unique Identification (HUID) number before making payment. A BIS hallmark provides assurance of declared purity, with consumers able to use the BIS Care app to verify hallmark details independently. The verification process involves entering the six-character alphanumeric HUID engraved on the jewellery, checking purity, jewellery type, jeweller registration details, and hallmarking centre information.
As reported by CNBC TV18, gold plays a key role in any multi-asset allocation strategy, dampening portfolio volatility and helping deliver better risk-adjusted returns. For most diversified investors, 10-15% of financial assets represents a sensible strategic range for gold allocation. Investors are better served staggering their gold investments over six to twelve months rather than lump-sum investments, easily achieved through a systematic investment plan. Abhishek Kumar, SEBI-registered investment adviser, suggests that existing investors should view this year's tepid returns as a pause after last year's blockbuster gains, with realistic long-run return expectations closer to high single digits or low double digits annually. The case for long-term gold investment remains strong despite near-term volatility, with experts expecting volatility to remain elevated over the next 6-12 months.
