Will gold prices keep rising till Dhanteras and Diwali? Here’s what analysts say
Traditionally, Dhanteras and Diwali boost physical demand for jewellery and coins. The festival effect still supports prices, but elevated price levels are capping how much retail demand can rise.
1. Current momentum: gold is at record highs
Gold has been rallying strongly in 2025 and recently hit fresh record levels as investors price in further U.S. rate cuts and seek safe havens amid geopolitical and macro uncertainty. That global momentum is the main force pushing local (Indian) prices upward heading into the festival season.
2. India-specific drivers: rupee weakness + futures jump
In India, the rupee’s depreciation and tracking of global bullion have amplified gains: Indian gold and silver futures jumped to record highs this week, pushing domestic 24k/22k rates to new peaks. A weaker rupee makes imported bullion costlier, which feeds directly into retail prices ahead of Dhanteras/Diwali.
3. Festive demand vs. price pain — two opposing forces
Traditionally, Dhanteras and Diwali boost physical demand for jewellery and coins. But analysts warn that current record prices are already denting buying appetite, Bloomberg reports jewellers expect lower festive-season demand because high prices are forcing consumers to postpone or buy lighter pieces. The festival effect still supports prices, but elevated price levels are capping how much retail demand can rise.
4. What market analysts are saying (short-term vs long-term views)
Some market strategists remain constructive on gold’s medium-term outlook (citing further Fed easing as a support), while others advise caution and a “sell-on-rise” approach because technical indicators show overstretched levels. For example, analysts at Mirae Asset/Sharekhan warned that while gold could test higher resistance (near $3,800/Rs 1.14–1.15 lakh per 10g), a short-term correction is likely and bulk physical buying at current peaks is not recommended.
5. Supply-side & central-bank behaviour matters
Central bank activity and jewellery off-take also shape the backdrop. The World Gold Council / market commentaries note that while some central bank buying supported earlier gains in 2024–25, RBI purchases have moderated in 2025, a factor that can reduce structural support if demand weakens. That moderation lessens a strong supply-side bid even as retail demand competes with price sensitivity.
6. Key risks that could stop the rally before Dhanteras/Diwali
Be mindful of three obvious reversal triggers: (a) a surprise hawkish turn or delayed Fed cuts that strengthens the dollar; (b) sharp profit-taking by funds after the 2025 rally; and (c) an unexpected rebound in jewellery buying that changes sentiment. Any of these can quickly alter momentum and produce a pullback in both global and domestic prices.
7. Bottom line & what retail buyers should consider
Analysts’ consensus is mixed: structural drivers (rate-cut expectations, geopolitical risk, weak rupee) support higher gold in the run-up to Dhanteras/Diwali, but high price levels and technical indicators increase the chance of short-term corrections. Practical takeaway: if you plan to buy physical gold for festivals, consider staggered purchases or smaller quantities rather than lump-sum buys at peaks; for investors preferring exposure, gold ETFs let you scale in without parking large sums in high-priced physical metal. Sources cited above offer both the upside case and the cautionary technical view.
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