Source : INDIA TODAY NEWS
Gold’s glitter has faded sharply over the past few months, leaving investors with a key question: Is this correction the buying opportunity they have been waiting for?
After hitting an all-time intraday high of Rs 1,92,991 per 10 grams on the Multi Commodity Exchange (MCX) earlier this year, gold has slipped to around Rs 1,42,413, down nearly Rs 50,600, or over 26%, from its peak.
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The latest decline comes as international gold prices head for their biggest monthly fall since October 2008, weighed down by expectations of higher US interest rates and a stronger dollar.
WHY ARE GOLD PRICES FALLING?
Spot gold fell more than 1% on Tuesday and is set to end June with a decline of nearly 13%, marking its fourth consecutive monthly loss, according to Reuters.
The precious metal is also headed for its biggest quarterly decline since 2013 as investors moved away from safe-haven assets and focused instead on the likelihood of higher interest rates in the US.
“You have high inflation, high interest rate expectations, and a strong dollar, and that’s overriding all other bullish factors that are typically associated with a gold rally,” Edward Meir, an analyst at Marex, told Reuters.
Gold typically performs well during periods of uncertainty and inflation. However, it loses some of its appeal when interest rates rise because, unlike bonds or fixed deposits, it does not generate any regular income.
Markets are currently pricing in three US Federal Reserve rate hikes this year, with about a 64% chance of a September hike, according to the CME FedWatch Tool, Reuters reported.
WHAT ARE EXPERTS SAYING?
Dr. Renisha Chainani, Head of Research at Augmont, said gold has now declined for four consecutive weeks and is down nearly 30% from its January 2026 international peak as investors continue to grapple with a hawkish US Federal Reserve, elevated inflation and a stronger dollar.
She noted that while the recent US-Iran conflict briefly revived demand for safe-haven assets, the rebound did not last as rising crude oil prices shifted attention back to inflation and the possibility of further interest-rate hikes.
According to Dr. Chainani, markets are now closely watching this week’s US non-farm payrolls report and ISM Manufacturing PMI, which could determine the Federal Reserve’s next policy move.
IS THIS THE RIGHT TIME TO BUY GOLD?
The sharp correction has prompted many investors to consider whether this is the right time to accumulate gold.
Dr. Chainani believes the answer depends largely on upcoming US economic data.
According to her, if labour market data weakens or inflation eases, gold could recover towards the $4,100-$4,150 range. However, if the US jobs report remains strong, prices could once again test the crucial $4,000 support level.
She added that COMEX gold currently has strong support between $3,950 and $4,000. A decisive break below that range could trigger another leg of selling towards $3,600, while resistance is expected around $4,250.
SHOULD INVESTORS START BUYING NOW?
While the nearly Rs 50,000 correction from the peak has made gold more attractive than it was a few months ago, experts suggest investors avoid rushing in all at once.
Instead of trying to time the bottom, staggered purchases through systematic investment plans (SIPs) in gold ETFs, sovereign alternatives or digital gold can help reduce the impact of short-term volatility.
The medium-term outlook for gold will continue to depend on three factors: the US Federal Reserve’s interest-rate decisions, the strength of the US dollar and geopolitical developments in West Asia.
For now, the correction has undoubtedly made gold cheaper than its record highs. Whether it proves to be the best buying opportunity of the year will depend on whether inflation cools enough for the Fed to soften its stance—or whether higher interest rates keep the pressure on bullion for longer.
(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)
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SOURCE :- TIMES OF INDIA
