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Below the Quote on Dhanteras by Deveya Gaglani, Senior Research Analyst - Commodities, Axis Securities

Domestic gold prices have corrected by more than 22% from their 2026 peak. This downturn is primarily driven by heightened inflation concerns stemming from a sharp surge in crude oil prices, which has temporarily dampened the appeal of the yellow metal. Geopolitical gridlock is exacerbating this trend; the absence of a US-Iran agreement has injected a significant risk premium into oil markets. Speculation that Donald Trump may resume airstrikes on Iran following the midterm elections continues to apply downward pressure on gold.

In the short term, gold faces continued downside risk and is expected to consolidate, as it is currently trading below its critical support zone of $3,960. With markets pricing in an anticipated Federal Reserve rate hike in December 2026, we expect further price corrections, potentially driving the metal down to test the $3,700 and $3,600 support levels. Despite these near-term headwinds, current price levels present a highly attractive entry point for long-term investors, particularly those who missed the previous year's rally. Factoring in the current negative catalysts, the remaining downside risk is limited to approximately 5% to 8%. However, the macroeconomic landscape could shift favorably in the medium term. If a geopolitical peace agreement is reached in the coming months and inflationary pressures are curbed, the Federal Reserve may pivot toward rate cuts—a move that would serve as a powerful long-term catalyst for gold prices.
Investors are advised to begin accumulating gold in a staggered, systematic manner at these lower valuations. We maintain a long-term bullish outlook with a price target of 165,000 to 180,000 levels by next Dhanteras. 

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