Gold Prices Set to Fall Ahead of Dhanteras; How Much Further Will They Drop by Diwali?

Gold prices are set to decline significantly ahead of Diwali. On the Multi Commodity Exchange (MCX), the price of gold has reached a level of approximately ₹1,47,300 per 10 grams.

The festive season in India is currently at its peak. People shop extensively ahead of Dhanteras, Diwali, and the wedding season that follows. During this period, there is a particularly high demand for gold and silver jewelry. For those who had long been anticipating a substantial drop in gold prices, there is good news: the cost of gold has fallen significantly.

On the Multi Commodity Exchange (MCX), gold is trading today at ₹1,46,482 per 10 grams—a decline of 0.03% from the previous session's closing price of ₹1,46,519. Meanwhile, in the international market, spot gold has fallen by 0.3% to $4,128.92 per ounce, while U.S. gold futures for December delivery have dropped by 0.3% to $4,148.50.

Why is the price of gold falling?

Tensions have escalated once again following reports on Monday that Iran-backed Houthi rebels from Yemen have launched attacks on energy, airport, and military installations in Saudi Arabia. The Houthis have claimed that they targeted a Saudi Aramco facility in Yanbu, the Shaybah oil field, King Khalid International Airport in Riyadh, and Abha Airport using ballistic missiles and drones. Meanwhile, a missile attack by the Houthis on a military training camp in Yemen’s Shabwa province on Monday left 53 soldiers dead and over 200 injured. This has reignited concerns among investors regarding potential disruptions to energy supplies.

Rising oil prices would lead to higher transportation costs, increasing operational expenses for companies. This, in turn, would drive up the prices of everyday goods. If inflation rises, central banks might become more cautious about cutting interest rates. Overall, the economy would come under significant pressure.

If interest rates are raised to curb inflation, investors will likely favor assets that offer a return, which diminishes the appeal of investing in gold.

Will gold become even cheaper?

Experts believe that a major decline in gold prices during the festive season is highly unlikely. This is because demand for gold jewelry and coins is expected to remain robust, driven by Dhanteras, Diwali, and the subsequent wedding season. This will provide support to gold prices in the domestic market.

Renowned market analyst Anuj Gupta estimates that, with the potential for gold to reach $4,600 per ounce in the international market, domestic gold prices could touch the range of ₹160,000 to ₹165,000 per 10 grams by Diwali or the end of the year. Furthermore, in its recent 'Gold Price Outlook Report,' brokerage firm Ventura Securities has projected a price range of ₹150,000 to ₹165,000 per 10 grams for gold ahead of Diwali 2026.