What happened to gold bought during last Dhanteras?

Dhanteras is the time when Indian households bring home auspicious items such as precious metals, utensils and new household goods, as symbols of prosperity and good fortune. But gold, whether in the form of jewellery, coins or small investments, remains the purchase that draws the most attention. Gold prices have surged since last Dhanteras, touching a record high in January, but has seen a slide in recent months. So, where does the value of the gold you bought last Dhanteras stand? And what is the current demand for the precious metal?

Dhanteras is on November 6 (Friday) this year. Prices are currently hovering around Rs 1.38 lakh to 1.41 lakh per 10 grams for 24-carat gold, while 22-carat gold per 10 grams is trading in the Rs 1.27 lakh to 1.29 lakh range. These rates are before GST and making charges.

Compared to 2025, buyers will have to shell out more for the precious metal this Dhanteras despite the recent fall in gold prices. The sharp correction from its record high earlier this year has offered some relief though.

Gold is roughly 5.5% to 7.6% more expensive than it was around Dhanteras last year, when 24-carat gold was trading at around Rs 1.3 lakh to Rs 1.34 lakh per 10 grams. This translates into an increase of approximately Rs 8,000 to Rs 10,000 for every 10 grams over the past year.

Gold started 2026 on a strong note, touching a record high of around Rs 1.75 lakh per 10 grams in late January before witnessing a sharp correction. Prices have since fallen nearly 20% from that peak, with October alone accounting for a decline of around 5%.

Gold's sharp correction this year has also challenged the traditional perception of the precious metal as a safe-haven asset during periods of geopolitical uncertainty.

So, for buyers planning to invest in gold on Dhanteras and Diwali, the picture is mixed.HIGH GOLD PRICES HIT JEWELLERY AND COIN DEMAND: REPORT

Gold's recent correction has not meant that investors have turned away from the precious metal altogether. The World Gold Council's (WGC) latest report, released on Tuesday (November 3), shows that central banks and institutional investors returned as significant buyers in the third quarter, even as retail demand remained cautious.

Central banks added a net 321 tonnes of gold to their reserves in the July-September quarter, a 42% increase from the same period last year. Their purchases in the first nine months of 2026 stood at 675 tonnes, 6% higher than a year earlier. Gold-backed exchange-traded funds (ETFs), which saw outflows in the second quarter, also returned to inflows, adding 211 tonnes during the third quarter.

Louise Street, senior markets analyst at the World Gold Council, said geopolitical risks and concerns around government finances had helped revive institutional interest in gold.

However, the picture is different for individual buyers. Global demand for gold bars and coins fell 19% year-on-year in the third quarter, with investors waiting for a clearer direction in prices. Jewellery demand also dropped 17% globally year-on-year in the July-September quarter, as high prices continued to weigh on purchases.HAS DEMAND FOR GOLD DROPPED IN INDIA?

The trend is particularly relevant for India ahead of Dhanteras. The WGC said Indian gold demand rose from the previous quarter in July-September, helped by seasonal buying and softer prices towards the end of the quarter. But demand was still 29% lower than a year earlier. Jewellery demand rose 33% quarter-on-quarter to 100 tonnes, but remained 20% lower year-on-year.

Notably, India remained the world's second-largest market for gold bars and coins after China, accounting for around 21% of global demand in the July-September quarter. The WGC report also noted that digital gold purchases in India rose 44% year-on-year during the same quarter. For the January-September period, digital gold purchases were up 76% compared with the same period last year.advertisementWHY PM MODI ASKED INDIANS TO AVOID BUYING GOLDNotably, in May, Prime Minister Narendra Modi urged Indians to avoid buying gold unless necessary. "I would appeal to people not to buy gold for weddings for one year," he said.

He reiterated it in September, asking people to cut back on non-essential purchases to help conserve foreign exchange.

When households buy large amounts of gold which is imported, more dollars flow out of the country. This can widen India's current account deficit, which measures the gap between imports and exports.

India imports almost all the gold it consumes, and these purchases require large amounts of US dollars. High gold imports add to the country's import bill and can put further pressure on the rupee, particularly when India is also spending heavily on crude oil imports.

A Reuters poll of 30 analysts and traders published on October 27 also highlighted the impact of high US borrowing costs and a strong dollar on gold prices. The average forecast for gold in 2026 was lowered to $4,495 per ounce from $4,509 in the previous poll. However, analysts expect central banks and buyers in countries such as India and China to continue supporting demand for gold.advertisementWHY GOLD PRICES LOST MOMENTUM DESPITE GLOBAL CONFLICTSA Motilal Oswal Financial Services report, which analysed gold's performance during the first half of 2026, pointed to inflation and changing interest rate expectations as the biggest factors behind the loss of momentum. The report argued that the impact of geopolitical developments on gold increasingly depended on its inflationary consequences.

Gold began the year on a strong footing, supported by uncertainty over US President Donald Trump's tariff measures, strong inflows into gold exchange-traded funds (ETFs), continued central bank purchases and expectations of interest rate cuts by the US Federal Reserve.

However, the narrative changed in the second quarter. Tariffs and the US-Iran conflict began raising concerns about inflation rather than just global uncertainty. Higher crude oil prices threatened to push up transportation, manufacturing and electricity costs, making it harder for the US Federal Reserve to lower interest rates.

The Motilal Oswal report analysing the first half noted that markets moved away from expecting multiple rate cuts towards a higher-for-longer interest rate environment. This pushed US Treasury yields, the dollar and real interest rates higher, making gold less attractive compared with interest-bearing assets.

As the report put it, "Rising real yields outweighed traditional safe-haven demand", causing gold to lose momentum despite heightened geopolitical tensions.

The report also highlighted a change in investor behaviour. Global gold ETFs attracted strong investments in the first quarter, but investors began pulling money out in the second quarter. Some institutional investors shifted their money to fixed-income investments that offered better returns. At the same time, traders who had bet on gold prices rising began reducing their positions, adding to the fall in prices.

According to the Motilal Oswal report, the first half of 2026 showed that gold prices were being influenced more by inflation, interest rates and the strength of the dollar than by geopolitical tensions alone.WHAT IS THE VALUE OF GOLD BOUGHT LAST DHANTERAS?

So, despite the sharp rise in gold prices earlier this year, the return for someone who bought gold around last Dhanteras is relatively modest at 5.5% to 7.6%.

This is worth comparing with returns from fixed deposits and other fixed-income investments, which can sometimes offer comparable or better returns without the same exposure to daily price swings.

In other words, gold still holds traditional and long-term value, but its recent performance does not necessarily make it the most rewarding investment option over a one-year period.

With central banks and institutional investors continuing to buy, gold demand remains supported, but its next move will depend on interest rates, inflation and the dollar.- Ends