New Delhi, 20 October 2026: Investing in gold and purchasing it on festivals has always been the first choice for Indian families. The demand for gold generally increases significantly during the seasons of Dussehra, Diwali and Lagansara. However, the high prices of gold have brought about a big change in the purchasing habits of people. Some families are now opting for lighter weight jewelery instead of heavily tainted gold, while others are turning to gold coins, bars and gold exchange-traded funds. As gold prices have fallen below their record highs, buyers are confused whether this is the right time to buy or whether prices may fall further.
Recently, there has been a slight rise in the prices of gold, the main reasons for which include the weakening of the US dollar. Investors are keeping a close eye on the policy meeting of the US Federal Reserve to be held on October 27-28, which will decide the future direction of interest rates. In foreign markets, spot gold rose 0.1 percent to $ 4,145.22 an ounce, while US gold futures for December delivery were trading 0.1 percent higher at $ 4,164.70.
According to experts, this improvement has come after a decline of more than 26 percent from the record level of January 2026. Traders are speculating that the Federal Reserve may keep interest rates unchanged. Generally, higher interest rates put pressure on gold because it does not earn any interest, but the weakening of the dollar makes gold cheaper for foreign buyers.
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Tremendous rise in gold ETF and digital gold
Gold ETF in August was Rs. Net inflow of Rs 2,596.70 crore has come, which is Rs. This is much more than Rs 1,559 crore. This is the third consecutive month when positive inflow has been recorded. With 121.3 tonnes of gold, assets under management have increased to an estimated Rs. It has reached Rs 1.91 lakh crore. The average purchase of digital gold between June and August was Rs. 2,500 crore per month, which has registered an increase of 110 percent year-on-year in August.
On the other hand, there has been weakness in physical demand i.e. demand for physical gold. India's gold imports have declined to $2.3 billion in August, which is 45% less as compared to July and 58% less than the same month last year.
Despite falling prices, buying gold during festivals has been a cultural tradition in India. According to Rajiv Sharan, Research Head, Brickwork Ratings, the estimated price of 24 carat gold at the beginning of the festivals is Rs. It was trading at the price of Rs 1.48 lakh per 10 grams. Families have kept their budget almost the same, but are buying less jewelery in terms of weight. On the other hand, the trend of buying gold for investment purposes is increasing rapidly.
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Will gold prices increase again by Diwali?
The future of gold depends on the demand for festivals and weddings in the domestic market and global factors (such as US monetary policy, inflation expectations and geopolitical tensions). Experts believe that the long term outlook for gold is positive. In the coming days, demand from festivals will definitely support domestic prices, but it will be essential to keep an eye on global market trends.