MUMBAI: Brokerage firm Motilal Oswal Financial Services (MOFSL) has kept a positive long-term view on gold and silver, saying recent price corrections offer a chance to accumulate. It sees gold at $4,500–$4,700 an ounce in the medium term, or ₹1,60,000–₹1,68,000 in the domestic market.
The outlook is part of its latest Precious Metals Quarterly report, titled ‘Gold’s Rally: Deferred, Not Derailed’.
A volatile year
Unlike the largely one-way rally of 2025, precious metals have seen sharp swings in 2026. Gold hit a record of nearly $5,600 an ounce in January, fell below $4,000 and has since recovered. Silver rose above $100 an ounce before an even sharper fall. Movements in the rupee-dollar rate added to the volatility in Indian prices.
The report links the swings to changing expectations about US interest rates, persistent inflation, high bond yields and geopolitical developments.
Diwali buying and prices
Diwali and Dhanteras remain among India’s biggest occasions for buying gold and silver, helped by tradition and the wedding season. However, MOFSL said festive demand tracks domestic premiums, imports and physical buying volumes more closely than global prices.
Domestic Diwali gold prices have risen from about ₹30,000 in 2016 to nearly ₹1.50 lakh in 2026. Gold has generally done better in the 30 days before Diwali than in the 30 days after. In 2025, gold gained nearly 20% and silver about 38% in the month before the festival.
ETF demand stays strong
Investment demand has held up despite high prices. Global gold ETF holdings rose by about 187 tonnes in August and September 2026 to a record 4,256 tonnes, and third-quarter inflows touched a record $31 billion.
In India, gold ETF inflows jumped 71% month-on-month to ₹44.5 billion in September, while silver ETFs drew ₹19.7 billion. Gold imports eased to $1.8 billion in September from $2.3 billion in August, reflecting higher prices and curbs on bullion inflows.
Fed and yields hold the key
Navneet Damani, Head of Research – Commodities, MOFSL, said, “Gold continues to retain its importance as a defensive asset amid global economic and geopolitical uncertainties. However, its near-term trajectory will remain sensitive to the US Federal Reserve’s monetary policy, inflation trends, movements in the US dollar and real bond yields.”
He said the US Federal Reserve’s 25-basis-point rate hike in September, which took its policy rate to 3.75%–4.00%, had added to worries about tighter monetary conditions. Central-bank buying, steady investment demand and fiscal uncertainty continue to support gold, he added. In India, high prices have cut discretionary jewellery buying, though wedding and investment demand have held up.
Manav Modi, Commodities Analyst, MOFSL, said high US Treasury yields and a stronger dollar have weighed on prices, but record ETF holdings show investor interest remains resilient. “Silver, on the other hand, offers greater upside potential but is accompanied by significantly higher price volatility,” he said.
Buy on dips: the levels
According to the report, US real yields will remain the main driver of gold prices. Damani and Modi said the next turning point could come when real yields stop rising, especially if inflation, fiscal concerns or slowing growth change the monetary policy outlook.
MOFSL is maintaining a buy-on-dips approach to gold:
- International: accumulation zone $3,800–$3,900 an ounce; short-term target $4,200; medium-term target $4,500–$4,700
- Domestic (assuming ₹96 to the dollar): accumulation zone ₹1,35,000; short-term target ₹1,48,000; medium-term target ₹1,60,000–₹1,68,000
“Rather than chasing price momentum, we believe investors should focus on disciplined accumulation during corrections, keeping in mind the role of precious metals in wealth preservation and portfolio diversification,” the two analysts said.
Disclaimer: The views and price targets above are those of Motilal Oswal Financial Services. They are not recommendations from The Times of Mumbai. Investment in commodities and securities markets is subject to market risks. Readers should consult a SEBI-registered advisor before investing.