Gold Price Today: Buy Now or Wait for a Bigger Dip?

Gold Prices declined for a fourth consecutive session on Wednesday, October 21, offering some relief to Indian buyers preparing for Dhanteras, Diwali and the upcoming wedding season. However, rising crude oil prices, renewed inflation concerns and uncertainty surrounding the US Federal Reserve’s next interest rate decision have raised questions about whether the precious metal could become cheaper in the coming days.

On Wednesday around 11:30 am, gold futures on the Multi Commodity Exchange of India (MCX) were trading at Rs 1,45,898 per 10 grams, down 0.42%. Silver prices also weakened, with MCX Silver trading at Rs 2,09,028 per kilogram, a decline of 1.16%.

The correction comes at an important time for Indian households, as gold purchases traditionally increase during Dhanteras and Diwali. With the wedding season also approaching, many consumers are deciding whether to purchase jewellery at current prices or wait in the hope of a further decline.

Market experts suggest that gold could remain under pressure in the near term, although a sustained recovery cannot be ruled out. Technical support and resistance levels, movements in crude oil prices and signals from the US Federal Reserve will be important factors to watch.

Why Are Gold Prices Falling Ahead of Dhanteras?

Gold prices have come under pressure as higher crude oil prices have intensified concerns about inflation. Oil prices have moved higher amid worries about potential supply disruptions in the Middle East, including risks to shipping routes in the Red Sea and threats to energy infrastructure in Saudi Arabia.

Rising crude oil prices can increase transportation, manufacturing and other operating costs, potentially pushing inflation higher. This creates uncertainty for financial markets because central banks may need to keep interest rates elevated for longer if inflation remains persistent.

Investors are closely watching the US Federal Reserve’s upcoming policy meeting for clues about the future direction of interest rates. Changes in interest rate expectations can influence gold prices because the precious metal does not generate interest income, unlike certain interest-bearing investments.

When markets expect interest rates to remain high, gold can face pressure as investors reassess the relative attractiveness of different assets. Conversely, expectations of lower rates can support gold by reducing the opportunity cost of holding the non-yielding metal.

The current decline therefore reflects a combination of inflation concerns, oil market uncertainty and expectations about monetary policy. Although gold is often considered a safe-haven asset during periods of geopolitical uncertainty, its price can still fall when interest rate expectations and other market forces move against it.

MCX Gold Support and Resistance Levels to Watch

According to Ponmudi R, CEO of Enrich Money, MCX Gold opened lower near Rs 1,46,300 and was testing an important support zone between Rs 1,45,300 and Rs 1,46,000.

Support refers to a price area where buying interest may emerge and help slow a decline. Resistance is a level where selling pressure may increase and make it more difficult for prices to move higher. These levels are technical reference points rather than guaranteed turning points.

Ponmudi identified the following price ranges as important for traders monitoring gold’s near-term direction:

• Immediate support: Rs 1,45,300 to Rs 1,46,000.
• Next support zone: Rs 1,43,000 to Rs 1,43,700.
• Immediate resistance: Rs 1,48,000 to Rs 1,48,600.
• Higher resistance: Rs 1,50,000 to Rs 1,50,700.

According to Ponmudi, the Rs 1,48,000 level, which previously acted as support, has become resistance after gold failed to sustain its brief recovery on Monday. This suggests that buyers may need to push prices above the immediate resistance zone before a stronger recovery becomes apparent.

If gold falls below the Rs 1,45,300-Rs 1,46,000 support range, the next area to watch would be Rs 1,43,000-Rs 1,43,700. A sustained decline could indicate that selling pressure remains strong.

However, if prices hold above support and recover beyond the immediate resistance levels, the bearish momentum could weaken. Traders will need to watch how prices behave around these ranges rather than assuming that any single level will determine the market’s direction.

Technical Indicators Suggest Continued Weakness

Ponmudi also highlighted weakness in technical indicators, which are commonly used by traders to assess price momentum and identify possible changes in market direction.

The Relative Strength Index (RSI), an indicator that measures the strength and speed of recent price movements, was near 40 and below its signal line. This reading suggested that gold’s recent momentum was weak.

The RSI can help traders assess whether buying or selling pressure is strengthening, although it does not predict future prices with certainty. A reading near 40 indicates relatively subdued momentum but does not, by itself, guarantee that prices will continue falling.

The Moving Average Convergence Divergence (MACD) indicator also showed a widening negative histogram. This development suggested that downward momentum was increasing at the time of the assessment.

Taken together, these indicators point to the possibility of continued near-term pressure unless gold recovers above key resistance levels. However, technical signals can change quickly, particularly when markets respond to economic announcements, geopolitical developments or shifts in interest rate expectations.

Could Gold Prices Fall Further in the Coming Days?

Market experts believe another decline remains possible, particularly if crude oil prices stay elevated and inflation concerns continue to influence expectations about US monetary policy.

Aamir Makda, Commodity and Currency Analyst for Technical Research at Choice Broking, said gold had resumed trading on a broadly flat note at Rs 1,46,328 but was likely to remain negative for another session.

Makda pointed to higher crude oil prices and the upcoming Federal Reserve policy meeting as important factors affecting gold’s outlook.

He also noted that gold had found support around its 200-day Double Exponential Moving Average (DEMA), a technical indicator used to assess longer-term price trends. The indicator was positioned at Rs 1,45,861.

Makda identified Rs 1,47,415 to Rs 1,47,900 as the key resistance range. If gold moves above this area and sustains the recovery, it could indicate an improvement in near-term price momentum.

On the other hand, a sustained break below support could accelerate the decline. Makda said traders should consider a sell-on-rise approach during the session, reflecting his assessment that the near-term trend remained weak.

These comments represent the analyst’s technical view and should not be treated as a guarantee of future price movements. Gold prices can change direction quickly in response to new information, and technical indicators are only one part of the market outlook.

Should You Buy Gold Now or Wait for a Bigger Dip?

For consumers planning to purchase jewellery for Dhanteras, Diwali or an upcoming wedding, the recent price decline may offer an opportunity to buy at lower levels than in previous sessions. However, a short-term correction does not necessarily mean gold has reached its lowest point.

The decision to buy now or wait depends largely on the purpose of the purchase, the urgency of the requirement and the buyer’s ability to tolerate further price fluctuations.

1. If You Need Gold Jewellery for Dhanteras or a Wedding

Buyers who need jewellery for a specific festival or wedding may prefer to avoid making their entire purchase dependent on predicting the market’s lowest price. Waiting for a larger decline could help if prices fall further, but it could also mean paying more if gold recovers before the purchase is made.

One practical option is to divide a planned purchase into smaller portions, where feasible, instead of buying everything at once. This approach can spread the timing risk, although it does not guarantee a lower average purchase price.

2. If You Can Wait for a Lower Price

Buyers with greater flexibility may want to monitor the support levels identified by analysts. The Rs 1,45,300-Rs 1,46,000 range is particularly important in Ponmudi’s assessment.

If gold breaks below this zone and selling pressure continues, the next support area is Rs 1,43,000-Rs 1,43,700. A move towards that range could provide another buying opportunity, but the market is not guaranteed to reach it.

Buyers should also watch for a recovery above Rs 1,48,000-Rs 1,48,600. Such a move could suggest that prices are finding stronger buying interest, potentially reducing the opportunity to purchase at lower levels.

3. If You Are Buying Gold as an Investment

People buying gold for investment purposes should consider their investment horizon, financial goals and overall asset allocation rather than relying entirely on short-term price movements.

A few sessions of declining prices do not necessarily determine whether gold is attractive over a longer period. Investors should assess the role gold is expected to play in their portfolios and consider the risks associated with market volatility.

Those considering short-term trading should recognise that support and resistance levels can fail, and technical indicators may produce misleading signals. Decisions should be based on individual financial circumstances and risk tolerance rather than on the expectation that a particular price level will hold.

Why MCX Gold Prices Differ From Jewellery Shop Prices

Buyers should remember that MCX gold futures prices are not the same as the final price charged by a jewellery retailer. Exchange-traded prices provide a market reference, while retail prices can vary according to the city, purity, retailer and other costs.

The final jewellery bill may include making charges, applicable Goods and Services Tax (GST) and other invoice components. The design and craftsmanship of a piece can also affect its price, meaning two items with the same gold weight may have different final costs.

For this reason, a decline in MCX gold prices may not translate into an identical reduction in jewellery prices. Consumers should compare the quoted price per gram, gold purity, making charges and total bill before purchasing.

Buyers should also check that the jewellery’s purity and hallmarking details meet applicable standards. Comparing the complete cost rather than focusing only on the headline gold rate can help consumers make a more informed purchase.

What Should Gold Buyers Watch Before Dhanteras?

Three developments are likely to be particularly important for gold prices in the near term.

• Crude oil prices: Further increases could intensify inflation concerns and influence expectations about interest rates.
• US Federal Reserve policy: The upcoming meeting could affect market expectations for future interest rates, potentially influencing gold demand.
• Technical support and resistance: Gold’s behaviour around the Rs 1,45,300-Rs 1,46,000 support zone and the Rs 1,48,000-Rs 1,48,600 resistance range could offer clues about short-term momentum.

These factors could push gold in either direction. Persistent inflation concerns and higher interest rate expectations may keep prices under pressure, while a change in monetary policy expectations or a recovery in buying interest could support a rebound.

For festival shoppers, the key is to distinguish between a market opportunity and the practical need to make a purchase. Waiting for a further decline may be reasonable for buyers who have flexibility, but those purchasing jewellery for a fixed occasion should consider the risk that prices could recover before they buy.

Gold Price Outlook: A Dip Does Not Guarantee a Bigger Bargain

Gold’s recent decline has offered some relief to Indian buyers ahead of Dhanteras and Diwali, but market conditions remain uncertain. Rising crude oil prices, inflation concerns and expectations surrounding the Federal Reserve’s next policy decision could continue to influence prices.

Technical assessments from Enrich Money and Choice Broking point to the possibility of further weakness if gold fails to hold key support levels. At the same time, support around the 200-day DEMA and other technical price zones could help slow the decline if buying interest emerges.

Consumers planning festive or wedding purchases may consider their timing carefully, compare retail prices and avoid assuming that a further decline is inevitable. Investors, meanwhile, should focus on their financial objectives and risk tolerance rather than making decisions solely on the basis of short-term market movements.

Ultimately, whether to buy gold now or wait depends on individual circumstances. The recent dip may provide an opportunity, but there is no guarantee that prices will fall further before the festive season.

Disclaimer: The views, opinions, recommendations and suggestions expressed by the experts and brokerages quoted in this article are their own and do not necessarily reflect the views of the publication. This article is for informational purposes only and should not be treated as financial or investment advice. Consult a qualified financial adviser before making investment or trading decisions.