Title

Are Gold Prices Expected to Drop in India What You Should Know

Market Outlook: Are Gold Prices Expected to Drop in India?

Snapshot of Expert Views and Market Trends

• World Gold Council anticipates demand in India will remain subdued in 2025 — projected at 600 to 700 metric tons, down from 802.8 tons in 2024 — due to the record-high gold prices affecting jewellery demand. Investment demand remains modestly elevated though.

• Quant Mutual Fund issues a near-term warning that gold prices (in U.S. dollar terms) might drop 12–15% over the next two months, though its medium to long-term view remains positive.

• On the demand side, India witnessed a sharp 28% drop in gold demand during the recent festive season, signaling that consumers are pulling back amid elevated prices.

• A Morningstar analyst delivered a bold bearish forecast—predicting a potential 38–40% decline, which could bring Indian gold prices down to around ₹55,000 per 10 grams, versus nearly ₹90,000 at the time.

Introduction

Gold prices in India have soared to historic highs in 2025—but the question on many minds today is whether this rally can sustain. Some experts warn of a correction amid weaker consumer demand and elevated prices. Let us explore what could drive a drop in gold and how investors can navigate the landscape

Why Gold Prices Could Drop in India

1. Peak Prices Are Cooling Consumer Demand
   Surging gold prices have led to subdued jewellery purchases, with demand expected to fall in 2025, according to the World Gold Council.

2. Soft Festive Season Reflects Changing Purchase Behavior
   A 28% drop in demand during the highly anticipated festive buying period suggests consumers are holding back amid steep prices.

3. Official Estimates Signal Short Term Price Risk
   Quant Mutual Fund predicts a 12 to 15 percent decline in gold prices soon, which may reflect investor caution.

4. Severe Bearish Forecast from Morningstar
   A standout bearish scenario projects a 40 percent drop, possibly dragging Indian rates down to ₹55,000 per 10 grams if global sentiment shifts strongly.

What Could Keep Prices Elevated

• Investment and ETF Demand
  Despite weaker jewellery consumption, investment demand—such as through ETFs and bullion purchases—remains firm.

• Global Uncertainty and Safe Haven Appeal
  Persisting geopolitical risks and core global uncertainties may continue to support gold, even amid pricing pressure.

Strategy Pointers for Investors india

Conclusion india

While the longer-term fundamentals for gold remain in place, several indicators—including waning festive demand and analyst predictions—suggest a potential drop in gold prices in India. Whether this happens sharply or gradually, staying informed and planning strategically will be key.

Check our gold price support levels article and investment entry strategies guide for deeper insight.

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