Gold prices hold near Rs 1.43 lakh: Should festive buyers wait or buy now?

Gold prices have been holding near Rs 1.43 lakh per 10 grams, offering some relief to buyers preparing for Karwa Chauth, Diwali and the upcoming wedding season. With the festive rush picking up, many households are wondering whether to buy gold now or wait for prices to fall further.The yellow metal, however, faces a crucial week. Rising crude oil prices and the US Federal Reserve’s upcoming policy decision could influence its next move. Persistent inflation concerns may limit the scope for interest rate cuts, keeping bond yields and the US dollar firm. This could put pressure on gold, which does not offer regular interest income.At the time of writing, MCX gold was trading at Rs 1,42,674, up 0.46%. While the recent price levels may offer some comfort to jewellery buyers, the outlook remains uncertain.WHY GOLD PRICES ARE IN FOCUS THIS WEEKInvestors are watching developments in the oil market and signals from the US Federal Reserve to understand where gold prices could head next. Higher crude oil prices can push up inflation expectations. If inflation remains stubborn, the US Federal Reserve may have less room to cut interest rates. Higher interest rates and bond yields tend to make interest-bearing assets more attractive than gold, potentially limiting gains in the precious metal.However, gold also draws support from central-bank purchases, investment demand and concerns about government finances. These factors can help prices remain firm even when the broader economic outlook is uncertain. Ponmudi R, CEO of Enrich Money, said, “MCX Gold opened with a small gap up near 142,300 and is trading near 142,440, up 0.29%, holding between its support and resistance bands after last week’s slide.”His assessment suggests that gold is currently attempting to stabilise after its recent decline, although the market is yet to establish a clear direction.WILL RISING CRUDE OIL PRICES HURT GOLD?The relationship between crude oil and gold is not straightforward. Both can rise during periods of geopolitical uncertainty, as investors look for protection against risks and disruptions to supplies. However, their paths can diverge when higher oil prices begin to fuel inflation concerns.Manav Modi, Commodities Analyst at Motilal Oswal Financial Services Ltd., said, “Gold continues to hold around $4,000 despite easing geopolitical tensions, supported by strong investment and central-bank demand, fiscal concerns and some moderation in Treasury yields.”He explained that sustained high crude oil prices could raise inflation expectations, push bond yields higher and strengthen expectations of tighter US monetary policy. Such a combination could weigh on gold.On the other hand, a decline in crude oil prices could ease inflation concerns and reduce expectations of tighter monetary policy. This could help bond yields soften and provide support to bullion, even if geopolitical tensions ease.Modi said gold's relationship with crude oil largely works through inflation, interest rates, real yields and the US dollar rather than through a consistent direct correlation.For Indian buyers, the direction of international gold prices is important, but domestic prices can also be influenced by the rupee-dollar exchange rate, import costs and local market conditions.WHAT SHOULD BUYERS EXPECT BEFORE DIWALI?The timing is important for households planning jewellery purchases for Karwa Chauth, Diwali or weddings. A period of relative stability can make budgeting easier, but it does not necessarily mean that gold has become cheap or that prices will remain at current levels.Gold is also sensitive to market sentiment ahead of major events. Modi noted that the psychological $4,000 level, exchange-traded fund (ETF) flows, central-bank buying and sentiment ahead of the Federal Reserve meeting are keeping market participants on edge.For jewellery buyers, waiting for a substantial correction may not always work, particularly when a purchase is linked to a fixed occasion. Prices could fall further if the dollar strengthens and bond yields rise, but stronger investment demand or fresh uncertainty could push them higher again.Buyers should also remember that the MCX price is not the final price they pay at a jewellery store. Making charges, applicable taxes and the purity of the jewellery affect the final bill.IS IT THE RIGHT TIME TO INVEST IN GOLD?The answer depends on whether you are buying gold for a near-term occasion or as a long-term investment.For those purchasing jewellery for the festive or wedding season, buying in stages can help reduce the risk of committing the entire budget at one price. If the purchase is necessary within the next few days, trying to predict the exact market bottom may add unnecessary uncertainty.For investors, a single day's price movement should not determine the decision. Gold can help diversify a portfolio, but it does not generate regular income and can experience sharp price swings. Those investing for the long term may consider spreading purchases over time rather than investing the entire amount at once.Investors should also compare the costs of different routes. Jewellery includes making charges and other expenses that may not be recovered on resale. Gold exchange-traded funds and other regulated gold investment products offer different cost structures and risks, so the choice should depend on the investor's goals and investment horizon.(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)- Ends