Gold prices recover by 6.6% after crash: What should investors do now with their yellow metal holdings?

Gold prices went through a correction on the Multi Commodity Exchange of India (MCX) in the last two days, rising by 6.59% from Rs 1,47,878 on Monday to Rs 1,57,620 today (Wednesday, February 4, 2026). The recovery came after a steep fall of 15.61% from the peak of Rs 1,75,231 on January 29. As gold went through price correction, what can investors with a long-term view do about their gold investments?

Why did gold prices recover after a steep fall?

According to Manav Modi, commodities analyst, Motilal Oswal Financial Services Ltd, gold made a strong comeback after the steep sell-off in the past few sessions, aided by a weaker dollar.


Pointing out that gains in domestic gold markets were capped by a softer USD/INR, Modi further said: "Investor interest returned after gold corrected nearly 15% over the last three trading days, prompting value buying and short covering."

Amar Ranu, head, investment products and insights, Anand Rathi Shares and Stock Brokers, says gold rebound was driven by renewed safe-haven demand and bargain buying, supported by geopolitical tensions and expectations of future rate cuts.

MCX spot gold prices from January 1, 2026, to February 4, 2026

Date	Spot Price (Rs.)	Date-wise rise/fall (%)
01-Jan-26	132941
02-Jan-26	134143	0.90%
05-Jan-26	135779	1.22%
06-Jan-26	136210	0.32%
07-Jan-26	136103	-0.08%
08-Jan-26	135293	-0.60%
09-Jan-26	136645	1.00%
12-Jan-26	139967	2.43%
13-Jan-26	139799	-0.12%
14-Jan-26	139799	0.00%
15-Jan-26	139799	0.00%
16-Jan-26	141147	0.96%
19-Jan-26	143670	1.79%
20-Jan-26	147088	2.38%
21-Jan-26	153662	4.47%
22-Jan-26	150671	-1.95%
23-Jan-26	154120	2.29%
27-Jan-26	158885	3.09%
28-Jan-26	164621	3.61%
29-Jan-26	175231	6.45%
30-Jan-26	164389	-6.19%
02-Feb-26	147878	-10.04%
03-Feb-26	151858	2.69%
04-Feb-26	157620	3.79%

Will the rally in gold price continue for the next few days?

Modi says the durability of the rebound in gold prices will depend on whether the recent correction has fully flushed out leveraged and speculative long positions, along with follow-through demand from Asia.

Prithviraj Kothari, managing director at RiddiSiddhi Bullions Ltd. and president of the India Bullion and Jewellers Association Ltd, feels the US–India trade deal reduces near-term trade uncertainty, which may cap safe-haven demand and lead to short-term consolidation in gold. Kothari, however, feels a stronger Indian rupee could soften domestic bullion prices by lowering import costs.

IBJA's 999 purity gold prices from January 1, 2026 to February 4, 2026

Date	Gold 999 (10g) (Rs)	Per session rate up/down (%)
01-Jan-26	133461
02-Jan-26	134782	0.99%
05-Jan-26	136168	1.03%
06-Jan-26	136660	0.36%
07-Jan-26	136675	0.01%
08-Jan-26	135773	-0.66%
09-Jan-26	137122	0.99%
12-Jan-26	140449	2.43%
13-Jan-26	140284	-0.12%
14-Jan-26	142015	1.23%
16-Jan-26	141593	-0.30%
19-Jan-26	143946	1.66%
20-Jan-26	147409	2.41%
21-Jan-26	154227	4.63%
22-Jan-26	151128	-2.01%
23-Jan-26	154310	2.11%
27-Jan-26	158901	2.98%
28-Jan-26	164635	3.61%
29-Jan-26	175340	6.50%
30-Jan-26	165795	-5.44%
01-Feb-26	148697	-10.31%
02-Feb-26	148746	0.03%
03-Feb-26	151529	1.87%
04-Feb-26	158158	4.37%

China factor important in determining gold prices

Modi says physical buying has been reported as strong in Shenzhen, China, with investors stocking up ahead of the Lunar New Year, even as Chinese markets are set to remain shut for a little over a week from 16 February.

“At the same time, state-owned banks in China have tightened controls on gold investment products to curb excessive volatility,” says Modi.

What are market indicators for gold prices?

Kothari says the broader outlook of gold prices remains constructive.

According to Kothari, global factors such as expectations of a dovish US Federal Reserve, elevated geopolitical risks, fiscal stress in major economies, and sustained central-bank and ETF buying continue to support precious metal prices such as gold.

Modi says on the trade front, reports around an India–EU deal and US president Donald Trump’s comments on a sharp tariff reduction on India have added to optimism, though confirmation from India is still awaited.

“Markets now turn cautious ahead of preliminary PMI readings from major economies and US private payroll data later today,” says Modi.

What can a long-term investor of gold do in current situations?

Ranu says despite short-term volatility, many institutional forecasts remain constructive on gold’s outlook over the medium to long term on account of inflation risks, central bank buying and diversification demand.

According to Kothari, gold will remain range-bound with a positive bias.