Gold Prices Slip Over 21% From Record High as Inflation and Oil Prices Pressure Market

Gold futures on India’s Multi Commodity Exchange settled at ₹1,42,024 per 10 grams on Friday, marking a 21.43% decline from the record ₹1,80,779 reached on 29 January 2026. The metal has also slipped 4.7% in October, reflecting broader pressure on precious metals.

Market analysts said the sell-off was driven by a combination of rising Middle-East tensions, higher crude oil prices and persistent US inflation worries, which have reinforced expectations of a restrictive monetary policy stance. Higher energy costs and a stronger US dollar added to the downward pressure on gold and silver, with international gold prices falling about 4% for the week and slipping below $4,000 per ounce for the first time since mid-July.

The correction was further amplified by weakness in US technology stocks, particularly AI-linked firms, prompting margin calls that forced some investors to liquidate precious-metal holdings. Despite the decline, lower prices have spurred some physical gold buying in India during the Dussehra festival, offering limited support to demand, while Chinese jewellery demand remains subdued.

"Gold has corrected by nearly ₹38,600 from its record high, bringing it back to a crucial support zone around ₹1,40,000," said Ponmudi R, CEO of Enrich Money. He noted that while Diwali and the wedding season traditionally boost physical demand, festive buying alone is unlikely to reverse the broader market trend. He added that a sustained hold above ₹1,40,000 could trigger a recovery toward ₹1,48,000-₹1,52,000, whereas a break below that level might push prices toward ₹1,38,000-₹1,36,000.

Aamir Makda, commodity and currency analyst at Choice Broking, described the move as a sharp corrective phase driven by profit-booking, a stronger dollar and elevated bond yields. He expects gold to remain in a consolidation phase or maintain a mildly bearish bias ahead of Diwali, with central-bank policy and domestic price levels influencing short-term demand.

Both experts highlighted that the price correction creates opportunities for gradual accumulation rather than aggressive buying, recommending investors wait for confirmation of stability before increasing exposure.