Gold continues to shine bright, scaling a new high a few days ago on the back of strong festival demand. It hit a record Rs 1,32,294 per 10 grams in October, up almost 36 percent from the year ago period.
It has come down from the peak but just about. On November 6 morning, it was trading at Rs 1,20,002 on the MCX, up 0.17 percent from previous day’s close. With the wedding season on, the precious metal is expected to maintain its momentum, though prices are expected to cool from the festive high.
Is it time to invest in gold or increase allocation to the yellow metal? Let’s explore.
Gold price outlook, and factors that influence its rates
Gold will continue to strengthen its position as a safe asset class in the long term, analysts say.
“Looking ahead, we expect gold prices to remain well-supported over the next six to eight months, driven by central bank demands, currency fluctuations, and macroeconomic changes. The upcoming wedding season is also likely to further support domestic gold demand,” Samit Guha, MD & CEO at MMTC-PAMP, said.
Several factors, including supply and demand, influence gold prices. Another factor is the central bank gold reserves, as they supports the currency against depreciation.
The dollar plays a vital role in determining the price of gold, as the metal is typically benchmarked against the American currency when the bullion market opens. A stronger dollar makes gold more expensive for holders of other currencies, which can decrease demand and thus lower the price. A weaker dollar can make gold cheaper and more attractive, potentially driving prices up.
Central banks purchased 220 tonnes of gold in Q3 2025, an increase of 28 percent from the previous quarter, a recent World Gold Council report said. Of which, the Reserve Bank of India (RBI) added nearly 600 kilos between April and September, taking its reserves to about 880 tonnes.
Gold prices are expected to consolidate in the $3,900 (Rs 117,500)-$4,060 (Rs 122,500) for the next few days, Augmot Bullion said a report published on November 3. So buy on dips and sell on rallies.
Time to invest in gold?
“Fundamentally, gold has a negative standard deviation when everything starts falling, gold starts going up. But this time, we have seen a different phenomenon where actually everything was going up and the gold rate was also going up. As an investor in multiple assets, I’ve allocated 15-20 percent of my portfolio in gold,” Ranjit Jha, MD & CEO of Rurash Financials, said.
Investment in gold is itself diversified and assets provide varying returns over time in correlation to its market price.
The buying and selling price of physical gold, for instance, is determined by its market price, while RBI’s sovereign gold bonds (SGBs) provide 2.5 percent interest per annum on the investment, though it comes with a lock-in period of eight years. The value of one unit of SGB is equal to one gram of gold with 999 purity.
“We have seen two distinct sets of buyers. Those who accumulate gold consistently, irrespective of price, recognising its role in long-term wealth preservation. The other set of buyers are those who buy gold when the price goes down. Both consumer behaviours have become increasingly evident in recent months,” Guha said.
Individual investors can allocate 10–15 percent of their portfolio to gold as a strategic approach to balance portfolio and preserve value, through digital or minted products. This means diversifying investments across multiple assets instead of creating an all-in-one portfolio of gold products.
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