Manappuram, Muthoot Finance decline up to 3% as gold prices fall for three days

Gold, finance shares see profit booking. 

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26 Aug, 2025 12:21

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Gold loan companies came under selling pressure on Thursday as prices of the yellow metal extended their pullback from record highs amid profit booking in the bullion market.

Shares of Muthoot Finance slipped 4.29 percent to Rs 3,134.20 apiece on the NSE. The stock has declined for three straight sessions, losing nearly 6 percent during the period. Manappuram Finance also fell 2.8 percent to Rs 277.90 per share.

Gold prices eased for the third consecutive day as investors booked profits after a recent rally. Globally, the metal edged lower towards the $4,000-an-ounce mark amid concerns that its sharp gains had become overstretched.

Weakness in gold prices typically weighs on gold financing companies as the value of collateral declines, impacting loan margins.

However, gold prices inched higher today after some profit booking in early trade.

Gold, silver inch up on MCX but global pressure weigh on sentiment

Spot gold was trading 0.5 percent lower. "Gold witnessed a sharp decline of 385 points (8 percent) from its recent peak, marking a potential trend reversal after reaching historically overbought levels. Monday’s close recorded the highest monthly Relative Strength Index (RSI) ever observed, indicating exhaustion in bullish momentum and setting the stage for a corrective phase,” said Tejas Shigrekar, Chief Technical Research Analyst – Commodities and Currencies at Angel One Ltd.

With India’s festival season nearing its end, seasonal physical demand is expected to taper off, leaving prices vulnerable.

"We anticipate further downside into November and December. Investor sentiment has shifted and traders are increasing their exposure to put options, positioning for continued weakness in the coming months," Shigrekar said.

Despite the recent correction, gold remains up about 55 percent so far this year, supported in part by expectations that the US Federal Reserve may deliver at least one quarter-point rate cut by the end of 2025.

(With inputs from Bloomberg) 

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