Gold Prices Crash Below ₹1.26 Lakh, Biggest Drop In 12 Years – Should You Buy Or Wait?

Mumbai: Gold prices crashed sharply this week, marking their biggest single-day fall in 12 years. In global markets, spot gold slipped to USD 4,109.19 per ounce, down about 6 percent from its record high of USD 4,381.21 touched just a day earlier. This steep fall followed a 5 percent slide on Tuesday, the worst daily drop since August 2020.

Domestic Market Braces for Impact

In India, gold prices also retreated from record peaks. From a high of Rs 132,294 per 10 grams, the metal dropped to around Rs 128,000, falling more than Rs 4,000 or roughly 3 percent. The local bullion market was shut on Tuesday due to the Diwali Balipratipada holiday, but analysts expect a selloff when trading resumes in the evening session.

Why Are Prices Falling?

Experts say the sudden drop is mainly due to profit-taking after a strong rally this year. Gold had delivered nearly 60 percent returns in 2025, outperforming most asset classes. Now, as some investors lock in gains, prices are correcting naturally.

At the same time, signs of improving global trade relations have reduced the demand for safe-haven assets like gold. Optimism about a potential US-China trade deal and progress in India-US trade talks has boosted investor confidence in riskier markets.

What’s Next for Gold?

Market watchers are now focusing on the US inflation data expected later this week, which could influence the Federal Reserve’s interest rate decisions. Lower interest rates generally support gold, while stronger economic signals can push investors back into equities.

Analysts say that while the long-term factors supporting gold—like central bank buying and geopolitical concerns—remain positive, prices might struggle to climb further in the short term, especially near the USD 4,000–USD 4,400 per ounce range.

For now, experts suggest cautious optimism. The correction could offer a better buying opportunity if prices stabilise, but investors should watch global cues closely before making big moves.

Disclaimer: This article is for informational purposes only and not investment advice. Gold prices are volatile; investors should consult certified financial advisors before making any trading or investment decisions.