Gold prices drop in India as global cues turn softer: Should investors buy the dip

Gold prices in India continued to soften on Wednesday (October 29) after a steep decline earlier this week, mirroring global weakness as easing US-China trade tensions trimmed demand for safe-haven assets.

The price of 24-carat gold stood at ₹12,158 per gram on Wednesday, while 22-carat gold was priced at ₹11,145 per gram, as per Goodreturns data.

In the international market, spot gold edged up 0.2% to $3,957.42 per ounce, recovering slightly after Tuesday’s (October 28's) fall to its lowest level since October 7. US gold futures for December delivery were last seen down 0.3% at $3,971.20 an ounce.

“Gold dipped  due to diminishing safe-haven demand,” said Saumil Gandhi, Senior Analyst – Commodities at HDFC Securities.

Global signals weigh on bullion

Traders said optimism around a possible US-China trade deal has encouraged a shift from gold into equities and riskier assets. Top officials from both sides recently agreed on a draft framework to pause further tariffs and ease restrictions on key exports.

Kelvin Wong, Senior Market Analyst at OANDA, noted that “the fuel for this short-term correction in gold is a readjustment of safe-haven instruments towards more responsive assets like equities.”

Markets are also awaiting the US Federal Reserve’s policy decision, where a 25-basis-point rate cut is widely expected. Although gold typically benefits from lower interest rates, investors are watching for cues on whether this could be the Fed’s final cut in the current cycle.

Should investors buy the dip?

Analysts say the recent slide is a correction rather than a long-term reversal.

“After a 50%-plus rally this year, some profit-taking was expected,” said Aksha Kamboj, Vice President of the India Bullion & Jewellers Association (IBJA). “This phase looks more like consolidation than a new climb, so investors should accumulate gradually instead of chasing recent highs.”

While the short-term outlook remains cautious, lower interest rates, geopolitical uncertainty, and steady central bank buying continue to support the longer-term case for gold as a portfolio hedge.

-With Reuters inputs