Gold prices ease from record highs: Is the latest dip a buying opportunity for investors?

Gold prices have cooled slightly after touching record highs, prompting investors to reassess whether the recent correction offers a buying opportunity or signals a phase of consolidation following an extraordinary rally in 2025. While near-term volatility has picked up, the broader outlook for the yellow metal remains constructive, according to market experts.

In domestic markets, February gold futures on the Multi Commodity Exchange (MCX) were trading around Rs 1,35,668 per 10 grams, up 0.54%, even as prices remained off recent peaks. Earlier, MCX gold futures had slipped nearly 1.4%, or about Rs 2,000, to Rs 1,37,900 per 10 grams.

Globally, spot gold fell 1.9% to $4,448.23 an ounce, while U.S. gold futures for February delivery declined a similar 1.9% to $4,467.90.

Despite this pullback, gold has delivered a stunning performance in 2025, rising nearly 80% over the year. The rally has been underpinned by expectations of easier U.S. monetary policy, a weaker dollar, persistent geopolitical tensions, elevated sovereign debt levels, and aggressive gold buying by central banks across the world.

Why gold surged in 2025

Gold’s strength this year reflects a rare convergence of supportive macroeconomic factors. Interest rate cuts by major central banks, along with expectations of further easing by the U.S. Federal Reserve, have boosted demand for non-yielding assets. Fed funds futures suggest markets are pricing in two to three 25-basis-point rate cuts next year, with the first cut seen as a near coin toss by March.

Geopolitical conflicts, concerns over fiscal discipline—particularly in the U.S.—and a sharp rise in central bank gold purchases have further reinforced gold’s appeal as a hedge against uncertainty. Exchange-traded fund (ETF) inflows have also picked up, adding to upward momentum.

Is this correction a buying opportunity?

Analysts caution that some consolidation is natural after such a sharp rally. Jateen Trivedi, VP Research Analyst – Commodity and Currency at LKP Securities, expects gold to remain volatile in the near term, trading in a broad range of ₹1,35,000–₹1,42,000 per 10 grams.

“The broader trend remains volatile as markets reassess positions after the recent sharp rally. The Federal Reserve’s meeting minutes will be a key trigger, while thin holiday trading volumes could exaggerate price moves,” Trivedi said.

Aksha Kamboj, Vice President of the India Bullion & Jewellers Association (IBJA), said gold continues to hold near record levels due to strong safe-haven demand, a weakening rupee, and expectations of global monetary easing. She believes prices are likely to remain firm despite intermittent pullbacks.

Ross Maxwell, Global Strategy Operations Lead at VT Markets, echoed this view, calling gold a core portfolio allocation heading into 2026, supported by macroeconomic risks and sustained central bank interest. He noted that while silver may offer higher upside, it also carries greater volatility due to its dependence on industrial demand.

Outlook for 2026 and beyond

Looking ahead, analysts broadly expect the bull run in gold to extend into 2026, albeit with continued volatility. Trivedi sees gold’s trading band shifting higher over the next 12–18 months, with prices potentially moving toward ₹1,50,000 per 10 grams.

Institutions such as Kotak Securities and UBS believe gold is entering a “higher-for-longer” phase, with some projections placing global prices near $5,000 an ounce over the next year. Ongoing currency debasement risks, diversification away from fiat assets, and a gradual easing bias from the U.S. Fed are expected to support this trend.

Risks to watch

Experts caution that gold’s momentum could weaken if U.S. real yields rise sharply, the dollar strengthens, or geopolitical tensions ease materially. A slowdown in central bank purchases or a renewed hawkish shift by global policymakers could also cap gains.

Still, most analysts agree that any meaningful correction is likely to be shallow. For long-term investors, dips may offer accumulation opportunities rather than signalling a trend reversal, with central bank demand, safe-haven appeal, and strong consumption from markets like India providing a durable floor for prices.