Recently, the price of gold reached ₹78,450 per 10 grams, driven by the festive demand during Navratri and Diwali. However, many potential buyers—those purchasing wedding jewelry or investing in gold—are now waiting for prices to drop. If you're not in a hurry to buy, it may be worth waiting as a correction in gold prices is expected soon, with a possible drop of up to ₹5,000, bringing the price down to ₹70,000 per 10 grams.
Expected Price CorrectionAccording to a report by Motilal Oswal, gold prices may stabilize at the current level for some time but are likely to fall by 5 to 7 percent soon. Based on the current rate, this could result in a decrease of over ₹5,000 per 10 grams. The report also highlights that gold hasn't delivered a 32 percent annual return since 2000, suggesting that a price correction is likely.
Also Read: Gold Prices Surge by Rs 250 to Record High of Rs 78,700 per 10 Grams
Why Are Gold Prices Rising?Several factors are driving the increase in gold prices. The report points to the upcoming U.S. presidential election, domestic ETF imports, SPDR holdings, and CFTC positions. The main drivers behind the surge in the first nine months of 2024 were the U.S. Federal Reserve's policies and ongoing geopolitical tensions. Additionally, future demand from central banks, combined with the festive and wedding seasons, is expected to keep the market sentiment positive.
Long-Term Outlook: Gold May Reach ₹86,000Despite the anticipated short-term correction, Motilal Oswal predicts that gold prices could rise to ₹86,000 per 10 grams in the next two years. The current festive season demand is already boosting prices, and rural demand is showing signs of improvement. A favorable monsoon and strong crop yields are expected to strengthen the rural economy, further driving gold purchases. Investor interest in Indian gold ETFs has also risen, especially after the recent Union Budget cut import duties and offered tax exemptions on ETFs. So, while a short-term correction is likely, the long-term outlook for gold remains bullish.