International gold prices fell 25 per cent from a record high of $5,600 in late January to $4,179 by 16 October. Rising US Treasury yields caused this drop, but central banks kept buying. Artha Bharat said, "the correction has made gold more attractive," as many Indians continue to save gold.
International gold prices, measured in US dollars, touched a record high of close to $5,600 an ounce in late January 2026. By 16 October, spot gold stood at about $4,179, roughly 25 per cent lower. The headlines that celebrated gold nine months ago now ask whether the bull market is over.
ASSOCHAM estimated in April 2026 that Indian households hold nearly $5 trillion of gold, more than the top ten central banks combined. Gold is woven into how India saves, and Dhanteras brings the decision to buy into almost every family.
At Artha Bharat, we believe that the correction has made gold more attractive. The pressure behind the fall is easing, the buyers with the longest horizons have kept buying, and global Indians now have an additional route to own physical gold through GIFT City.
Why gold fell, and why that pressure is easing
Rising US Treasury yields were a major headwind. When gold peaked in late January, the 10-year Treasury yielded about 4.24 per cent. By 5 October it had closed at 5.31 per cent, and the 10-year inflation protected yield had reached 2.92 per cent, close to its 2008 record. For an asset that pays no interest, that is the highest holding cost in nearly two decades.
Gold absorbed that shock well and has so far held above its late June low of just under $4,000 even as inflation protected yields made fresh highs. The week ended 16 October brought some relief: the 10-year yield touched 5.33 per cent and fell to about 5.09%, its largest weekly decline in more than a year, despite hotter than expected US inflation of 3.7 per cent for September. Every easing in real yields lowers the cost of holding gold.
The buyers with the longest horizons have not left. Central banks bought a net 289 tonnes of gold in the second quarter of 2026, a record for a second quarter, in the very months the price was falling, led by Poland and China. Despite a sharp downward revision to first quarter data, the World Gold Council still expects another strong year of official demand. In India, gold ETFs drew ₹4,451 crore of net inflows in September, taking the year-to-date total past all of 2025.
A disciplined approach
Gold plays a key role in any multi asset allocation strategy, dampening the volatility of the overall portfolio and helping to deliver better risk adjusted returns. So, this brings us to the question of how much to allocate to gold because unlike debt or equity, which earn interest or dividends, gold by itself doesn’t yield anything.
The right allocation depends on an investor's existing gold holdings, objectives and tolerance for volatility. For most diversified investors, I see 10 to 15 per cent of financial assets as a sensible strategic range. Investors are better served staggering their investment in gold over six to twelve months rather than a lump sum investment. This is easily achieved through a SIP of a suitable duration.
Where gold is held matters
For investors, each traditional route involves a tradeoff. Jewellery carries making charges and purity risk and is costly to sell (due to deductions). Gold bought in India's domestic market is priced in rupees and carries import duty over the international rate.
GIFT City offers a combination of international pricing, physical backing and custody in India. The India International Bullion Exchange (IIBX), launched in 2022, trades London Bullion Market Association (LBMA) standard gold at international dollar prices, with the metal held in insured vaults inside GIFT City.
Since commodity trading was notified as a financial product under the IFSCA Act in January 2026, regulated funds can invest in this gold, giving investors low-cost professional custody and regulatory oversight that an individual buyer of bars cannot easily replicate. What’s more these funds are denominated in hard currency offering protection from potential INR depreciation.
Conclusion
Ahead of Dhanteras, international gold prices on 16 October were about 25% below their January peak, Treasury yields had come off their highs, and central banks were still accumulating. For investors with a long horizon, that is a reason to build positions steadily. For India, it is a moment to show that global investors can access internationally priced physical gold through India's own financial infrastructure.