As gold prices fall, is it right time to invest?

The spot gold price on the Multi Commodity Exchange of India (MCX) in the last two months has been far from its peak of Rs 1,75,231 per 10 gram on January 29, 2026. In September, the highest gold price was Rs 1,54,425 on September 4, while in October, the highest rate was Rs 1,48,909.

As far as the lowest spot gold price this month is concerned, it reached the month’s low on October 23 at Rs 1,41,031, a 19.42% fall from its peak price in January.

While a low price can be a testing time for investors who had purchased gold at its peak, it may produce investment opportunities for new gold investors. But is it the right time to invest in the yellow metal, or should investors wait for a further price correction?

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Why are gold prices down?

Prithviraj Kothari, president of India Bullion and Jewellers Association Ltd, told ET Wealth Online that the Fed rate hike from 3.75% to 4% in September, high US 10-year yield, slow central bank gold buying and high crude prices led to a fall in gold prices.

Suvankar Sen, MD and CEO, Senco Gold Ltd, however, calls low prices a natural and healthy correction.

“In the precious metals space, sharp upward trends are almost always followed by periods of consolidation and the unwinding of speculative positions,” says Sen.

However, at a time when it is trading approximately $4,000 per ounce compared to its peak of $5,595 on January 28, can gold buyers expect a recovery to the peak levels in the near future, cashing in on their investment at low prices?

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Kothari expects a return toward the peak in 2027–28. Kothari says that it is hard for gold to return to peak levels as US yields are high and the Fed is still talking about the rate hike.

“For now, $ 3,900- 4,000 are the support levels to watch,” says Kothari.

Vedika Narvekar, research analyst- commodities & currencies, Anand Rathi Share and Stock Brokers, says a recovery to the peak is unlikely in the near term and may take more than a year.

“The US Federal Reserve’s 27-28 October meeting is the next key trigger. A full recovery to the peak would require the rate-hike cycle to end and monetary conditions to become more supportive, which appears unlikely before 2027,” says Narvekar.

MCX spot gold highest and lowest prices since January 2026 (day-end rates)

Source: MCX

But if the gold price takes a year to recover, how can new gold buyers utilise the opportunity to invest?

Sen advises that rather than anxiously waiting for prices to bounce back to previous peaks, consumers and investors should focus on building a balanced, disciplined holding over time.

“If you want to make the most of this market, look at staggered buying or leverage flexible advance-booking schemes,” opines Sen.

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Kothari too advises investors to buy gold in stages. He reveals a strategy where he asks investors to split their investments into four to six parts and invest them over three to six months.

“Put in more if gold drops toward $3,800, which is roughly Rs 1,35,000 on the MCX,” says Kothari.

But which form of gold is the best to invest in? Physical gold, gold exchange-traded funds (ETFs), gold mutual funds, sovereign gold bonds (SGBs), electronic gold receipts (ECRs).

Which form of gold is best to invest?

Narvekar says for most people, gold ETFs are the best form of gold investment as they track gold prices closely, have low costs, need no storage, and carry no making charges or GST.

Sen says if your goal is personal adornment combined with a secure store of value, physical gold and handcrafted jewellery are unbeatable.

“If you are purely looking at financial asset allocation and liquid exposure to gold prices without the storage hassle, regulated products like gold ETFs are worth exploring,” says Sen.

Kothari recommends buying gold ETFs from a tax perspective as they carry no Goods and Services Tax (GST), and gains on units held for more than 12 months are taxed at a flat 12.5% rate.

However, at present, many mutual fund houses have stopped investments in gold ETFs and gold fund of funds. So, before investing, you need to check the status of that particular fund.

“Physical and digital gold have to be held for 24 months to get the same 12.5% rate,” says Kothari.

However, Kothari says SGBs are still the best option if you bought them at the original issue and hold till maturity, as the gains are tax-free and you also earn 2.5% interest a year.