Gold's 192% Dhanteras rally: Rs 92,000 jump in five years, but can the yellow metal reclaim its lost shine in 2027?

Gold has been one of the biggest wealth creators for Indian investors over the past five Dhanteras celebrations. From Dhanteras 2021 to the run-up to Dhanteras 2026, the yellow metal has delivered extraordinary returns, with domestic prices climbing nearly 192%.

Yet this year's festive season brings a sharp contrast. After scaling record highs in January 2026, gold has suffered a steep correction, leaving investors to weigh the opportunity of buying the dip against the risk of further volatility.

Dhanteras, the first day of Diwali, holds a special place in India's precious metals market. Buying gold and silver on the occasion is considered auspicious, with households traditionally associating the purchase of precious metals with prosperity, security and long-term wealth creation.


Gold prices have fallen more than 22% from their all-time high of around Rs 1,80,000 per 10 grams, with domestic rates currently hovering around Rs 1,40,000. Silver has witnessed an even sharper correction, declining more than 56% from its record high in late January 2026.

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Dhanteras to Dhanteras: Gold delivers golden performance

Gold's performance over the past five Dhanteras celebrations has been exceptional. Domestic prices have risen from around Rs 47,904 per 10 grams in November 2021 to approximately Rs 1,40,000 in late October 2026, ahead of this year's Dhanteras. This translates into an absolute return of nearly 192% over five years.

Should you buy gold this Dhanteras?

With gold trading at a steep discount from its record high, the correction has brought buying decisions back into focus. Market experts, however, are advising investors to avoid committing their entire allocation at current levels and instead consider staggered purchases.

Ponmudi R, CEO of Enrich Money, said the festive season could offer Indian investors an opportunity to gradually build their exposure to gold rather than make large purchases in one go.

"Investors should avoid deploying their entire allocation at one price. A staggered buying approach is more sensible, particularly after such a volatile correction. Jewellery purchases should be based on personal requirements, while investment decisions should consider price, liquidity and the overall portfolio allocation," he said.

Nirprendra Yadav, analyst at Bonanza, echoed a similar approach, cautioning investors against trying to identify the exact market bottom or investing their entire allocation in a single transaction. For investors with a long-term horizon, staggered buying can help manage volatility and reduce the risk of entering the market at an unfavourable price.

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Gold targets for 2027

Despite the recent correction, some brokerages believe lower prices have improved gold's appeal for long-term investors.

Axis Securities said current levels appear attractive, given that gold has corrected more than 20% from its peak. The brokerage believes this offers investors who missed the earlier rally an opportunity to gradually increase their gold allocation.

While the possibility of higher interest rates could keep volatility elevated in the near term, Axis Direct expects gold to deliver returns of approximately 18%-22% by the next Dhanteras, provided favourable developments materialise. It has set a target price range of Rs 1,65,000-Rs 1,71,000 per 10 grams.

Religare Broking has pegged gold's accumulation range at Rs 1,30,000-Rs 1,35,000 per 10 grams, equivalent to 3,665-3,805 per ounce. The brokerage has set the first upside target at Rs 1,50,000 per 10 grams ($4,230 per ounce), followed by a second target of Rs 1,58,000 ($4,455 per ounce). On the downside, Rs 1,21,000 per 10 grams ($3,410 per ounce) is the key support level. A breach below this mark would invalidate the positive outlook.

For silver, Religare Broking recommends accumulation in the Rs 1,50,000-Rs 1,63,000 per kg range, corresponding to $41.5-45 per ounce. It has set an initial target of Rs 2,17,000 per kg ($60 per ounce), with a higher target of Rs 2,55,000 ($70 per ounce). The key support level stands at Rs 1,09,000 per kg ($30 per ounce), below which the positive outlook would be negated.

Will gold make a comeback in 2027?

Several global investment banks continue to maintain a positive outlook on gold over the longer term, despite the near-term pressure from inflation and monetary policy.

Standard Chartered expects gold to average $4,650 an ounce in the fourth quarter before rising to $4,850 in the first quarter of 2027. This forecast comes even as expectations of further Federal Reserve tightening remain elevated.

Bank of America (BofA) is also projecting a recovery next year. It expects gold to reach $4,750 an ounce in the first quarter of 2027, followed by a rise to $5,000 in the second and third quarters.

Goldman Sachs shares a similar longer-term view. Although it lowered its end-2026 gold price target to $4,650 in September, the investment bank retained its 2027 forecast of $5,400 an ounce.

These projections point to a longer-term recovery in gold prices, although the near-term outlook remains clouded by inflation, interest rate expectations and uncertainty surrounding the geopolitical environment.

The contrarian view: Bank of America sees more pressure on gold

Not all forecasts are pointing towards an immediate recovery. BofA expects gold to remain below $4,000 an ounce over the next three months, although it forecasts an average price of $4,000 an ounce in the fourth quarter.

The bank's demand tracker shows that purchases by key buyers have declined 16.6% year-on-year. Indian imports fell 77.8%, while Chinese imports increased 39.3%.

Jewellery demand has also weakened across major markets. According to World Gold Council data, jewellery demand declined 25% in the US, 15% in India and 28% in China during the second quarter.

Central bank buying, which has been an important source of support for gold, could also face headwinds. In a note dated October 12, BofA flagged the possibility of central banks turning net sellers amid escalating tensions in the Middle East.

"With the Middle East conflict escalating again, there is a risk that central banks could resume sales," BofA said, according to a Yahoo Finance report.

The bank pointed to Turkey's net gold sales of 82 tonnes and Russia's 56 tonnes through August, as reported by the World Gold Council, as examples of the trend.

Inflation and the Federal Reserve's monetary policy are adding to the uncertainty. US consumer prices increased 3.7% year-on-year in September, exceeding the forecast of 3.6%. Core inflation also came in higher than expected at 2.6%.

The Federal Reserve raised interest rates to 3.75%-4% in September, with officials signalling another hike this year. BofA believes gold could find a bottom only after the Fed concludes its tightening cycle.

A pause in the dollar's rally and easing concerns over the Iran war could also support a recovery in bullion prices. At the same time, renewed concerns over currency debasement remain another potential source of support. Some traders are already interpreting BofA's cautious outlook as a contrarian signal.

For investors heading into Dhanteras, the contrast is clear. Gold has delivered exceptional returns over the past five years, but its latest correction has brought volatility back into the picture. Whether the metal can regain its upward momentum by the next Dhanteras will depend on how inflation, interest rates, central bank demand and geopolitical developments shape the global bullion market.


Disclaimer: This article has been written by Veer Sharma, who is not a SEBI-registered Research Analyst or an Investment Adviser. Veer Sharma and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here