Gold's spectacular rally has given way to a sharp correction, leaving investors at a crucial crossroads as Samvat 2083 begins. Domestic gold prices have fallen nearly 21% from their record high of ₹1,80,779 per 10 grams to around ₹1,42,364, wiping out a significant portion of the gains that had fuelled the precious metal's record-breaking run. The latest selloff has been driven by weaker spot demand, with gold futures on the MCX declining 1.51% on Friday, 6 November, to ₹1,41,917 per 10 grams.
Yet, the correction comes against a backdrop of strong long-term returns and a historically favourable pre-Diwali trend. Motilal Oswal's analysis highlights how domestic gold prices have climbed from around ₹30,000 in 2016 to nearly ₹1.50 lakh in 2026. With prices cooling after an extraordinary rally, the key question for investors is whether the decline offers an attractive entry point or signals further downside. Should investors buy the dip, stagger their purchases or wait for greater clarity?
The chart highlights a sharp correction in both gold and silver prices on the MCX in recent months after a strong rally earlier in 2026. MCX gold, which climbed to around ₹1.65 lakh per 10 grams in March, has since retreated to nearly ₹1.40 lakh. Silver has witnessed an even sharper decline, falling from its peak of around ₹4 lakh per kg in February to nearly ₹1.70 lakh. The trend indicates that precious metals have given up a significant portion of their earlier gains, with silver witnessing greater volatility than gold.
According to a Motilal Oswal report, the upcoming US midterm elections could add another layer of volatility to gold prices, alongside developments in monetary policy, inflation and geopolitics. The brokerage said market reactions to the elections could influence fiscal expectations, the US dollar and Treasury yields. However, the key trigger for gold may not be the peak in nominal yields, but a point at which real yields stop rising.
The brokerage noted that if real yields ease amid elevated inflation expectations, rising political and fiscal uncertainty, or signs that monetary tightening is hurting economic growth, the same bond market stress currently weighing on gold could eventually support its next leg of gains. A divided US Congress could add to policy uncertainty, while continued Republican control may keep concerns over fiscal deficits and Treasury supply elevated. Ultimately, the direction of real yields, rather than the election outcome itself, is likely to remain the more important indicator for gold.