Gold prices crashed in the domestic futures market amid a sharp correction in the global market. MCX Gold, due to expire on December 4, plunged by Rs 2,839 to an all-time low of Rs 1,39,757 per 10 grams as compared to the previous day's closing of Rs 1,42,596.
The yellow metal have been witnessing a declining momentum for the past two months as the gold futures contract declined over 11 per cent from Rs 1,57,888--It's two months high on September 3.
Latest seen, the MCX Gold was trading at Rs 1,39,952, down Rs 2,644 or 1.85 per cent. At the same time, COMEX Gold, December Expiry, was quoted at $3,945, down $86.40 or 2.14 per cent.
Analysts attribute this fall to worsening geopolitical situations in the Middle East and rising US bond yields. Meanwhile, many would be wondering if this fall is a good opportunity for festive gold buying on or before the auspicious day of Dhanteras and Diwali. Let's see what analysts have to say.
Is Sharp Decline In Gold A Buying Opportunity Ahead of Diwali?
Shiva Grover, Founder, Equitrust Solutions, believes that the decline appears more like a cyclical pullback within a broader structural uptrend rather than the start of a prolonged bear market.
Recommended For You
"Central bank buying, ongoing geopolitical risks, and gold’s role as a portfolio diversifier continue to provide a solid medium- to long-term floor," he noted.
Grover advised investors to take a cautious approach while buying gold in such a scenario ahead of Diwali.
"For investors, the current decline offers a selective buying opportunity, especially for those with a multi-year horizon. However, near-term volatility is likely to persist until there is greater clarity on the Fed’s path and inflation trajectory. Fresh investments should be staggered rather than made in one go," the analyst advised.
What Are Key Factors Behind Decline in Gold Prices
Analysts attributed the recent correction in gold prices to a sharp rise in US Treasury yields and a stronger dollar.
"Higher real yields have increased the opportunity cost of holding a non-yielding asset like gold, while elevated oil prices - triggered by Middle East supply concerns — have revived inflation fears and reinforced the “higher-for-longer” rates narrative," Grover emphasised.
Additionally, profit-booking after the strong 2025–early 2026 rally and some cross-asset liquidations have added to the selling pressure.
Jateen Trivedi, VP Research Analyst- Commodity and Currency at LKP Securities, noted that despite volatility during the week and a brief recovery in the early sessions, selling pressure intensified towards the end, leaving bullion down around 0.50% for the week.
"Notably, gold has witnessed cumulative selling pressure of more than 6% over the last three weeks, indicating continued weakness in market sentiment," Trivedi said.
What To Drive Bullion Market Going Forward
- Key factors include US bond yields, dollar strength, and movement in crude oil prices to drive the bullion market going forward.
- The movement of rupees against the dollar will also drive the bullion market.
- Meanwhile, US election-related uncertainty and key US economic data, particularly unemployment figures and non-farm payrolls, could also be factors.
Gold Down 11% In 2 Months
Gold futures, due to expire on December 4, are down over 11 per cent in two months. At the beginning of September, the contract price was at Rs 1,55,400. Later, it hit a high of Rs 1,57,888 per 10 grams on September 3.
On October 30, the contract hit a lowest level of Rs 1,39,757, representing an 11.48 per cent fall from two months high of Rs 1,57,888.