Gold Prices Drop ₹13,000 from Peak Ahead of US Fed Decision — Is This the Right Time to Buy?

The ten-month-long euphoria in gold markets has cooled sharply as MCX gold prices plunged over ₹13,000 from all-time highs, slipping below ₹1,20,000 per 10 grams in Tuesday’s trade. The correction comes amid renewed global risk appetite, optimism over a potential US–China trade truce, and investors booking profits after an extended rally.

According to analysts, the rise in US bond yields and easing geopolitical tensions have also dampened gold’s short-term appeal. “With bond yields on the rise and reduced geopolitical tensions, gold’s short-term appeal has softened, giving way to some profit-taking,” said Ross Maxwell, Global Strategy Lead at VT Markets.

Despite the decline, gold remains one of the top-performing asset classes in 2025, still up around 50% year-to-date, driven by robust central bank purchases, rising fiscal deficits, and lingering concerns over currency stability and geopolitical risks.

💰 All Eyes on the US Fed Decision

Investors are now keenly watching the US Federal Reserve’s policy outcome on Wednesday, where the central bank is widely expected to cut interest rates by 25 basis points. Lower interest rates generally support non-yielding assets like gold, as they reduce the opportunity cost of holding bullion.

Maxwell believes that any dovish guidance from Fed Chair Jerome Powell could reignite bullish momentum in gold. “If the Fed signals further policy easing, gold might regain its upward momentum,” he said.

Similarly, Manav Modi, Analyst – Precious Metals at Motilal Oswal Financial Services, noted that while short-term optimism in equities may pressure prices, the long-term case for gold remains intact.

“This week’s Fed policy meeting could provide clarity on future rate trajectories. Comments from Governor Powell will be key in determining market direction,” Modi said.

📉 Buy or Wait?

Experts maintain a ‘buy on dips’ stance but advise caution against rushing in. “While this dip may be a good accumulation opportunity for long-term investors, it’s better to wait for prices to stabilise before initiating fresh positions,” Modi added.

Maxwell echoed similar sentiment, suggesting that long-term investors could treat this correction as a portfolio diversification opportunity. “Gold continues to be a cornerstone for wealth preservation, especially during global economic uncertainty,” he said.

With the Fed decision imminent, traders and investors are likely to stay on the sidelines until policy clarity emerges. Should the Fed lean dovish, the yellow metal may once again shine in the weeks ahead.

Originally published on newsworldstime.com.