On the Multi Commodity Exchange (MCX), gold was trading 0.03% lower at Rs 1,46,482 per 10 grams, compared with the previous session’s closing price of Rs 1,46,519. In the international market, spot gold fell 0.3% to $4,128.92 per ounce, while US gold futures for December delivery declined 0.3% to $4,148.50 per ounce.
The decline comes at a time when consumers traditionally increase purchases of gold and silver jewellery, particularly ahead of Dhanteras, Diwali and the wedding season. For buyers who have been waiting for a significant correction in gold prices, the recent fall offers some relief.
However, developments in the Middle East and their potential impact on energy supplies could influence the precious metal’s price trajectory.
Tensions have escalated again after Yemen’s Iran-backed Houthi rebels said on Monday that they had carried out attacks targeting Saudi Arabia’s energy infrastructure, airports and military installations.
The Houthis claimed to have targeted Saudi Aramco’s facility in Yanbu, the Shaybah oil field, King Khalid International Airport in Riyadh and Abha Airport using ballistic missiles and drones.
Separately, a Houthi missile attack on a military training camp in Yemen’s Shabwa province on Monday reportedly killed 53 soldiers and injured more than 200.
These developments have renewed concerns among investors about possible disruptions to energy supplies. Any disruption that pushes oil prices higher could increase transportation costs and raise operating expenses for companies. Higher costs could, in turn, make everyday goods more expensive and add to inflationary pressures.
Rising inflation could make central banks more cautious about cutting interest rates, putting additional pressure on the economy.
If interest rates rise to contain inflation, investors may increasingly favour assets that generate returns. This could reduce the relative appeal of gold, which does not offer regular income, and put downward pressure on its price.
Despite the recent decline, experts believe a major fall in gold prices during the festive season is unlikely. Demand for gold jewellery and coins is expected to remain strong because of Dhanteras, Diwali and the wedding season that follows. This demand could provide support to gold prices in domestic markets.
Market analyst Anuj Gupta expects gold to have the potential to reach $4,600 per ounce in the international market. At the domestic level, he estimates that prices could touch Rs 1,60,000 to Rs 1,65,000 per 10 grams by Diwali or the end of the year.
Brokerage house Ventura Securities has also outlined an optimistic price outlook. In its recent Gold Price Outlook Report, the brokerage set a target range of Rs 1,50,000 to Rs 1,65,000 per 10 grams for gold ahead of Diwali 2026.
With festive and wedding-related demand expected to support the domestic market, gold prices could remain influenced by two competing factors: consumer demand in India and international developments affecting inflation and interest rates. The recent decline may offer buyers some relief, but the projections from market analysts and Ventura Securities suggest that prices could still move towards higher levels in the coming months.
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