Is Gold's 26% Drop The Ultimate Diwali Buying Opportunity? Here's What Experts Say

Gold has corrected over 25 per cent from its January peak of $5,600 per ounce in the international market amid persistent geopolitical concerns, elevated crude prices due to supply disruption through the Strait of Hormuz, and rising bond yields. Meanwhile, as Diwali and Dhanteras approach, commodity experts suggest that the current pullback offers a more attractive valuation for long-term investors.

They warned that rather than making lump-sum purchases or attempting to time the market bottom, investors are advised to take a staggered approach to buying while utilising flexible instruments like Gold ETFs.

Is Correction in Gold A Buying Opportunity? 

Kaveri More, Commodity Technical Analyst at Choice Broking, said that Gold’s correction of more than 26 per cent from its January peak (above $5,600/oz) has made valuations relatively more attractive, with prices now around $4,136/oz and MCX gold trading below the Rs 1.50 lakh mark. 

“However, the recent decline has been driven primarily by higher US Treasury yields and a firmer dollar, along with changing geopolitical expectations, while rupee movements are also influencing domestic prices. Hence, the correction appears more like a phase of consolidation and repricing rather than a reason to rush into lump-sum buying,” More said. 

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Should Yoy Buy Ahead Of Diwali? 

The analyst noted that ahead of Diwali, investors should avoid trying to identify the exact bottom and instead consider staggered buying over the next few weeks, preferably in 3–4 tranches.

For festive or jewellery requirements, buyers can purchase according to their needs, while for investment purposes, Gold ETFs can offer greater flexibility and avoid jewellery-making charges. 

“At the same time, gold may remain volatile and could see further downside before stabilising, with support seen around $3,950/oz. Investors should therefore maintain a sensible allocation to gold and avoid deploying funds that may be required for short-term expenses,” Kaveri noted. 

Gold Rate Today

Meanwhile, on Tuesday, COMEX Gold was around Rs $4197.30 per ounce, up $40.50 or 0.97 per cent. At the same time, the yellow metal prices closed in positive territory on Tuesday, erasing early losses. Gold Futures, December 4 expiry, settled at Rs 1,50,302, up Rs 986 or 0.66 per cent.