Gold, silver fall offers scope for 15-35% gains by next Dhanteras: Analysts
Purchasing gold and silver is considered auspicious on Dhanteras, and the recent correction in the precious metal prices makes them ideal contra buys for long-term investors looking to take exposure, with analysts expecting another 20-25 per cent rise in prices in a year.
Gold prices, trading at ₹142,000, are 20 per cent down from their all-time high of around ₹180,000 per 10 grams hit in late January, putting them in correction territory. Silver, meanwhile, has faced a steeper decline as its value has more than halved to ₹187,000 per kg from above ₹400,000 around the same time.
Gold and silver ETFs have largely mimicked this trend, as evidenced from the tables below.
Headwinds such as sticky inflation, elevated yields on the back of the crude oil spike, and renewed Fed tightening expectations have weighed on the precious metals.
Analysts believe that even though short-term volatility may persist, geopolitical uncertainty, central-bank diversification, constrained supply and investment demand continue to provide structural support.
Navneet Damani, head of commodity research at Motilal Oswal Financial Services, said that most of the negatives are already built into prices, with a possible reversal setting in. Gold, the brokerage said, remains a relatively defensive choice, while silver offers greater upside leverage accompanied by significantly higher volatility.
In 2026, the conflict and elevated inflation concerns have strengthened expectations of further monetary tightening, with markets anticipating another rate hike in December. However, if inflation moderates and the Fed begins cutting
rates in 2027, gold could benefit from declining bond yields and a weaker dollar. Renewed investment demand could further support prices, as per Axis Direct.
Annual central bank purchases have remained around 1,000 tonnes in recent years, providing structural support to gold prices. Investment demand has also strengthened.
The precious metals now present a dramatically altered tactical landscape compared to their multi-year highs. According to Monarch Networth Capital, the violent correction in 2026 was a technical deleveraging event within an ongoing bull cycle, rather than a fundamental trend reversal.
MOFSL also highlighted a positive trend for the yellow metal in the run-up to the festive season. Pre-Diwali performance has consistently exceeded post-Diwali returns in the last 10 years, barring 2016 and 2021.
“The historical evidence therefore suggests that Diwali acts more as a seasonal demand and positioning catalyst than an isolated one-day event, while the magnitude of returns ultimately remains governed by the prevailing global macro cycle,” said MOFSL in a note.
Gold, silver targets
Analysts say some volatility may not be ruled out, with a likely 2-3 per cent correction. However, both gold and silver could be favourable, with gains of up to 15-35 per cent from current levels.
For gold, Damani suggests a buying range of around ₹1,41,000–₹1,43,000, with the 12-month target of ₹1,68,000, translating into upside of 16 pr cent. As for silver, the buying range can work out to ₹1,75,000–₹1,72,000, with a target of ₹2,55,000 suggesting a 36 per cent rise from last close.
Axis Direct has a more upbeat outlook of gold rising by 18 per cent by next Dhanteras, with target prices of ₹165,000–Rs 171,00.
ETFs vs physical gold
While ETFs are one of the ideal mechanisms to invest in bullion, this time around, with so many unknowns and developments coming in from the government as well, probably one could look at physical investment in bullion also, believe experts.
Against this backdrop, Damani advises some exposure in physical gold and some in ETFs.
Disclaimer: Views and outlook in this report belong to the brokerages and analysts cited. They do not reflect the views of Business Standard. Readers are advised to exercise discretion.
