Gold Falls 26% from January Peak – Should You Buy Ahead of Diwali? by Kaveri More, Commodity Technical Analyst at Choice Broking
Gold’s correction of more than 26% 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 Rs1.50 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.
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.
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