- Rs 1 lakh now buys approximately 7.1 grams of 24-carat gold, up 25% from January highs
- International gold prices fell 4% to $3,875 an ounce amid market selloff and inflation fears
- Analysts advise staggered investment in gold, highlighting long-term potential despite volatility
Dhanteras, in the upcoming week, is seen as an auspacious ocassion by scores of Indians to buy precious metals. For gold buyers, the current rates offer relief as they are way below their peaks recorded in January 2026. The purchase, at the current price levels, can result in about 25% more gold being bought as compared to the rates that stood at the start of this year.
Rs 1 lakh spent on gold in late January would have bought about 5.7 grams of 24-carat metal. The same amount buys about 7.1 grams today.
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The India Bullion and Jewellers Association's benchmark rate for 24-carat gold closed at Rs 1,40,054 per 10 grams on Friday. That is about 20% below the record of Rs 1,75,340 hit on Jan. 29. For buyers, that works out to roughly 25% more gold for every rupee compared with the peak, days before Dhanteras on Nov. 6.
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On MCX, the drop has been sharper. December gold futures settled at Rs 1,38,419 per 10 grams on Friday, about 23% below their January high of Rs 1,80,779, according to MCX data.
Cheaper Than January, Not Cheaper Than Last Year
Bargain hunters should not get carried away. Last Dhanteras, IBJA's 24-carat rate stood at Rs 1,29,584 per 10 grams, on Oct. 17, 2025, the last working day before the festival. At that price, Rs 1 lakh bought 7.7 grams. Gold today is about 8% costlier than it was then, so the same money buys roughly 7.5% less metal.
Investors who bought last Dhanteras are still sitting on a small gain. Those who bought at the January peak are down about 20%, as Rs 1 lakh invested then is now worth roughly Rs 79,900.
The benchmark rates also exclude 3% GST and making charges. After GST alone, Rs 1 lakh buys about 6.9 grams of 24-carat gold at Friday's rate. With jewellery making charges of around 12%, the figure falls to roughly 6.2 grams.
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The fall picked up pace on Friday. Spot gold dropped close to 4% to around $3,875 an ounce, its lowest in a year, as a tech-led selloff on Wall Street triggered forced selling across assets. International gold is now about 30% below its January record of $5,595.
Rising crude prices have added to the pressure. Brent settled above $117 a barrel on Friday after another tanker attack in the Strait of Hormuz, keeping inflation fears alive and raising bets that the US Federal Reserve will hike rates again in December. Higher rates make non-yielding assets like gold less attractive.
Should You Buy?
A number of analysts say the correction is an opportunity for long-term investors, but not a signal to buy all at once.
“Fresh investments should be staggered rather than made in one go,” Shiva Grover, founder of Equitrust Solutions, was quoted as saying by The Daily Jagran on Friday. He said the fall offered selective value for investors with a horizon of several years, but cautioned that volatility could persist until the Fed's path becomes clearer.
Kaveri More, commodity technical analyst at Choice Broking, struck a similar note earlier this month. She told the publication that the slide looked more like a phase of consolidation and repricing “rather than a reason to rush into lump-sum buying.” She advised investors to keep a sensible allocation to gold and not put in money they might need in the near term.
The longer-term case for gold has not gone away. Analysts told Reuters that central bank demand tends to strengthen whenever prices fall below $4,000 an ounce, and Commerzbank said in a note that it expects precious metals to recover. State Street's gold strategy team, led by Aakash Doshi, still assigns a 60% probability to gold trading at $4,750-$5,500 by the end of the first quarter of 2027, according to Kitco News. The team has, however, flagged a bear case of $4,000-$4,750 over the next six to nine months.
Disclaimer: This article is only for informational purpose. Readers are recommended to consult their financial advisors before taking investment decisions.
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