Gold has always been one of the most trusted investment options for Indians, especially during festivals like Diwali. However, right after Diwali 2025, gold prices have seen a noticeable decline. Investors are wondering: why is gold dropping, and what can we expect in the coming months?
Why Are Gold Prices Falling After Diwali 2025?
There are several key reasons behind this sudden drop in gold prices:
- Reduced Festive Demand:
During Diwali, gold demand peaks due to weddings and traditional buying. Once the festival ends, demand naturally drops, creating short-term price pressure. - Stronger U.S. Dollar:
The U.S. dollar has strengthened recently, which directly impacts gold prices. A strong dollar makes gold more expensive for other currency holders, lowering global demand. - Global Market Sentiment:
Investors are shifting focus toward equities and bonds due to improving global growth indicators, leading to less interest in safe-haven assets like gold. - Profit Booking by Traders:
Many short-term investors booked profits after Diwali highs, which added selling pressure in the market.
Bullish or Bearish? What Is the Phase Now?
Bearish Signals
- Short-term support levels are under pressure (e.g., ~₹1,18,000–₹1,20,000 for 10 g of 24 K in India).
- Metals are correcting after a strong rally, which can trigger more downside in the near term.
Still Bullish Path Ahead
- Inflationary pressures globally remain elevated and geopolitical tensions are unresolved — both are positives for gold.
- Central banks adding to gold reserves supports structural demand.
Forecast: What Could Happen by End of 2025 & Into 2026
Short-Term (Next 1–2 Months)
Expect more sideways movement or mild downside. If prices drop below key support zones (for example ~₹1,18,000 for 10 g 24 K in India), there is risk of further decline. If demand picks up (weddings, festivals) or the rupee weakens further, a bounce is possible.
Medium to Long-Term (Start of 2026)
If central banks move towards rate cuts and economic uncertainty increases, gold may resume its up-trend. Analytical views suggest potential levels of ₹1,30,000–₹1,35,000+ for 10 g of 24-carat gold in India. Internationally, gold may test US $4,400–4,600 per ounce.
What Should Investors and Buyers Do?
- Short-Term Traders: Focus on support/resistance zones and use technical indicators like RSI or MACD to time entries.
- Long-Term Investors: Use the current dip as an opportunity to accumulate modestly; avoid waiting for a “perfect bottom”—no one knows exactly where it is.
- Jewellery Buyers: Since this is for personal use, this rate tier is reasonable. However, if you can wait and see some more correction it might improve your cost basis.
NOTE :- this is not a financial advice
