Gold down 25%! Sell, Hold or Buy more? Experts say this dip could be...

Gold prices have corrected sharply from their January 2026 record highs, leaving many investors wondering whether the rally has finally run out of steam or whether the recent decline presents a fresh opportunity to accumulate the precious metal.

According to Chirag Mehta, Chief Investment Officer at Quantum AMC, the current selloff should be viewed as a temporary correction rather than the end of gold's long-term bull market.

Gold has fallen around 25.5% from its all-time high of $5,598 an ounce reached in January and recently slipped to around $4,171 an ounce. In India, MCX gold futures dropped to about ₹1,49,500 per 10 grams, their lowest level since early May.

The correction has been triggered by stronger-than-expected US economic data, rising bond yields, expectations of higher interest rates and the impact of the ongoing conflict in the Middle East.

However, Mehta believes investors should focus less on recent price action and more on the structural factors that powered gold's historic rally from $2,000 to nearly $5,600 an ounce.

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"The more consequential question for investors is not what has moved in the past two weeks, but what has not moved at all," Mehta said.

He noted that rising US debt levels, persistent inflation, concerns over fiscal deficits and continued diversification by central banks away from US Treasuries remain intact and continue to support the long-term case for gold.

"Price corrections of the kind currently unfolding are not aberrations within a structural bull market; they are features of it," Mehta said.

What history shows

Quantum AMC's analysis highlights that corrections of 25-35% have historically occurred within major gold bull markets and have often been followed by fresh highs.

During the 2008 financial crisis, for example, gold prices plunged 33% as investors liquidated assets to raise cash. But the metal subsequently recovered and rallied 178% over the following three years, eventually touching record highs in 2011.

Similarly, gold witnessed a 27% correction between January and March 2026 before rebounding strongly.

"The current correction appears less like a structural breakdown and more like a normal and necessary consolidation within an ongoing secular bull market," Mehta said.

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Is this a buying opportunity?

According to Mehta, the current weakness could offer long-term investors an opportunity to build exposure to the yellow metal.

"The current level of $4,098-$4,200 has twice served as a meaningful accumulation zone in 2026 alone," he said.

Central bank demand also remains strong. Global central banks purchased a net 244 tonnes of gold during the first quarter of 2026, while the People's Bank of China extended its buying streak to 19 consecutive months by adding nearly 10 tonnes in May.

Mehta believes the forces underpinning gold's long-term outlook have not diminished.

"Rising sovereign debt supply, structurally elevated inflation and central bank diversification away from US Treasuries continue to support gold," he said.

For investors worried by the recent decline, Mehta argues that history offers an important lesson.

"For long-term investors, corrections of this nature have historically represented meaningful opportunities to build or add to positions at levels that, in retrospect, marked the lower bound of a broader bull market. The thesis has not broken; the price has simply offered a better entry point," he said.

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