Gold Prices Falling? Experts Explain When To Buy, Sell Yellow Metal Or Invest In ETFs, Coins

Last Updated:February 18, 2026, 17:49 IST

Investors must understand that volatility is inherent to gold and corrections are part of its long-term price discovery process, say experts

Experts say gold coins or bars are better than jewellery investment purposes. (Getty Images)

After months of relentless rallies and record-breaking prices, gold is finally showing signs of cooling. The yellow touched Rs 15,420 per gram for 24 karat, Rs 14,135 per gram for 22 karat, and Rs 11,565 per gram for 18 karat on Wednesday. Is this shift the beginning of a correction or merely a pause before another surge?

Urban buyers tracking daily rates on mobile apps, families planning wedding jewellery, and small investors accumulating digital gold are asking whether they should invest now, hold what they own, or wait.

Considerations such as upcoming weddings, festive purchases, and savings habits often override textbook investment logic. Yet with volatility rising and mixed global signals, the line between emotional buying and tactical investing has never been thinner.

What’s Driving The Price Movement Globally

Gold’s recent correction is not occurring in isolation. Due to holiday seasons in the US and China, trade activity fell, reducing investor participation and increasing price pressure

Moreover, the strengthening US dollar has made precious metals costlier for buyers using other currencies, dampening global demand. At the same time, robust US employment data has reduced the appeal of traditional safe-haven assets such as gold and silver. Expectations that interest rates will remain stable have also discouraged investment in non-yielding commodities.

As of February 18, gold prices in the US are trading around $4,930–$4,950 per troy ounce.

When the US dollar strengthens, gold typically becomes more expensive for buyers using other currencies, dampening demand. Conversely, a weaker dollar often boosts gold prices as investors look for alternative stores of value. Bond yields also play a crucial role; when government bonds offer attractive returns, gold, which does not generate interest, can temporarily lose appeal.

“Gold has historically experienced meaningful interim corrections even during powerful bull phases. In past cycles, 10-20% drawdowns were common before prices resumed upward momentum. For example, during previous global easing cycles, gold corrected sharply multiple times before making new highs. This pattern reflects profit-booking, currency movements, and interest rate shifts. Investors must understand that volatility is inherent to gold and corrections are part of its long-term price discovery process,” said Harshal Dasani, Business Head, INVasset PMS – a Mumbai-based investment company.

Central banks around the world have been significant buyers of gold over the past few years, seeking to diversify reserves away from traditional currencies. However, even subtle changes in these buying patterns can influence global sentiment.

Will The Gold Price Correction Happen In The Coming Days?

Last month, gold prices in India hit an all-time peak at Rs 1.75 lakh, continuing their significant rise by almost 20%.

Darshan Rathod, Chief Operating Officer (COO), Multifyi a stock market advisory firm, said gold can see a short-term correction after a strong rise. “This is a normal market behaviour. Gold prices depend on factors such the US interest rates, inflation, dollar strength, and global uncertainty. When interest rates stay high or the dollar strengthens, gold may fall slightly. Historically, gold often corrects 5-10% after sharp rallies. Such corrections are part of normal price movement and do not change the long-term trend. Investors should understand that short-term volatility is common in gold.”

Is It The Right Time To Buy Gold?

One of the most common mistakes buyers make is treating jewellery purchases and investment decisions as identical. Jewellery is primarily a form of consumption. Making charges, design premiums, and resale deductions significantly reduce returns. Buying a necklace for a wedding is about aesthetics and sentiment, not yield optimisation.

Investment gold, on the other hand, functions differently. Coins and bars offer better price transparency but still involve storage and security considerations. Digital gold removes physical handling but relies heavily on platform credibility and regulatory safeguards. Exchange-traded funds provide liquidity and ease of trading, while sovereign gold bonds often offer interest earnings in addition to price appreciation. Each avenue carries its own mix of risk, taxation rules, and liquidity benefits. Understanding this distinction can prevent buyers from conflating emotional purchases with financial strategies.

Dasani said, “Instead of trying to perfectly time the market, investors should focus on allocation discipline. Gold is not a momentum trade; it is a hedge against macro uncertainty and currency volatility. If gold is underrepresented in your portfolio, gradual accumulation through staggered buying makes sense. However, aggressive lump-sum buying after a sharp rally can expose investors to near-term volatility. Ideally, gold should constitute around 10-15% of a diversified portfolio depending on risk appetite.”

Rathod stressed that gold is a “long-term asset used for stability, not quick profit”. “Instead of investing all money at once, gradual buying over time helps manage price risk. Many financial experts suggest keeping about 5-15% of total investment in gold for diversification. Even when prices are high, staggered investment can give a better average cost. Timing the exact bottom is difficult, so disciplined and long-term investment is usually more effective.”

What About Those Who Want To Sell Gold?

Rathod pointed out that selling gold should depend on financial needs and portfolio balance. “If gold becomes a large share of total investment after the price rise, partial profit booking may be reasonable. Selling may also be needed for planned expenses.”

However, selling during small price declines is usually not necessary, he added. A gradual selling approach can help achieve a better average price. Gold is generally held for long-term stability, so decisions should be based on financial goals, not the short-term price movement.

Dasani also echoed similar views. He said selling decisions should be “allocation-driven, not price-driven”. “If gold has rallied sharply and now exceeds your intended portfolio allocation, partial profit booking can be prudent. However, exiting completely may not be wise, especially in an environment of global uncertainty and shifting monetary cycles. Gold plays a strategic role as a hedge during market stress. Unless there is a pressing liquidity requirement, trimming exposure gradually is more sensible than making an emotional exit.”

Market analysts generally caution against interpreting early corrections as definitive downturns. Gold historically moves in cycles influenced by inflation, currency trends, and geopolitical stress. Short-term fluctuations can be sharp, but long-term trajectories tend to stabilise as global uncertainties resurface. Many experts suggest that while prices may cool in the near term due to currency realignments or profit-booking by institutional investors, the broader outlook remains tied to inflation hedging and reserve diversification.

Is This The Right Time To Invest In Gold?

For the middle class, a softening gold price brings mixed emotions. On one hand, it offers relief to families planning weddings or festive purchases. On the other hand, investors who bought at peak levels may worry about temporary erosion in value. The decision to buy or wait often depends on financial priorities rather than purely market signals.

Gold remains relevant as a portfolio diversifier, but timing should be staggered, highlighted Dasani. “Investors today have multiple options beyond physical gold—Gold ETFs, Gold Mutual Funds, and Sovereign Gold Bonds (when issued). Financial gold is generally more efficient and transparent. Instead of making a lump-sum allocation at current levels, systematic accumulation over months can reduce volatility risk while ensuring exposure to long-term structural drivers supporting gold.”

Rathod says gold can be included in a balanced portfolio when investment is done gradually. “Gold ETFs provide easy buying and selling through the stock market. Sovereign Gold Bonds offer gold price returns plus 2.5% yearly interest but require long-term holding. Physical gold provides ownership but includes storage and spread costs. Investors usually keep a limited portion of their portfolio in gold for stability,” he explained.

Gold Coins Vs Jewellery vs ETF vs Bonds: Risks, Charges Explained

Rathod says for investment purposes, gold coins or bars are “usually better than jewellery”. “Jewellery includes making charges and wastage, which reduce resale value. Coins and bars usually have lower additional costs and clearer purity through hallmark certification. Jewellery is more suitable for personal use rather than investment. If the objective is price exposure or wealth preservation, investment products like coins, ETFs, or bonds are generally more efficient.”

Gold ETFs provide high liquidity, transparent pricing, and no making charges, though they carry a small annual expense ratio, said Dasani. “They are suitable for tactical or flexible allocations. Sovereign Gold Bonds offer an additional 2.5% annual interest and capital gains tax exemption if held till maturity, making them attractive for long-term investors. However, SGB liquidity in secondary markets can be limited, and new issuances depend on government schedules. Choice depends on liquidity needs and investment horizon.”

Ultimately, gold’s enduring appeal lies in its ability to act as a stabiliser rather than a quick-profit vehicle. While short-term price movements capture headlines, its true strength has historically been in long-term wealth preservation and portfolio diversification.

Considerations such as upcoming weddings, festive purchases, and savings habits often override textbook investment logic. Yet with volatility rising and mixed global signals, the line between emotional buying and tactical investing has never been thinner.

What’s Driving The Price Movement Globally

Gold’s recent correction is not occurring in isolation. Due to holiday seasons in the US and China, trade activity fell, reducing investor participation and increasing price pressure

Moreover, the strengthening US dollar has made precious metals costlier for buyers using other currencies, dampening global demand. At the same time, robust US employment data has reduced the appeal of traditional safe-haven assets such as gold and silver. Expectations that interest rates will remain stable have also discouraged investment in non-yielding commodities.

As of February 18, gold prices in the US are trading around $4,930–$4,950 per troy ounce.

When the US dollar strengthens, gold typically becomes more expensive for buyers using other currencies, dampening demand. Conversely, a weaker dollar often boosts gold prices as investors look for alternative stores of value. Bond yields also play a crucial role; when government bonds offer attractive returns, gold, which does not generate interest, can temporarily lose appeal.

“Gold has historically experienced meaningful interim corrections even during powerful bull phases. In past cycles, 10-20% drawdowns were common before prices resumed upward momentum. For example, during previous global easing cycles, gold corrected sharply multiple times before making new highs. This pattern reflects profit-booking, currency movements, and interest rate shifts. Investors must understand that volatility is inherent to gold and corrections are part of its long-term price discovery process,” said Harshal Dasani, Business Head, INVasset PMS – a Mumbai-based investment company.

Central banks around the world have been significant buyers of gold over the past few years, seeking to diversify reserves away from traditional currencies. However, even subtle changes in these buying patterns can influence global sentiment.

Will The Gold Price Correction Happen In The Coming Days?

Last month, gold prices in India hit an all-time peak at Rs 1.75 lakh, continuing their significant rise by almost 20%.

Darshan Rathod, Chief Operating Officer (COO), Multifyi a stock market advisory firm, said gold can see a short-term correction after a strong rise. “This is a normal market behaviour. Gold prices depend on factors such the US interest rates, inflation, dollar strength, and global uncertainty. When interest rates stay high or the dollar strengthens, gold may fall slightly. Historically, gold often corrects 5-10% after sharp rallies. Such corrections are part of normal price movement and do not change the long-term trend. Investors should understand that short-term volatility is common in gold.”

Is It The Right Time To Buy Gold?

One of the most common mistakes buyers make is treating jewellery purchases and investment decisions as identical. Jewellery is primarily a form of consumption. Making charges, design premiums, and resale deductions significantly reduce returns. Buying a necklace for a wedding is about aesthetics and sentiment, not yield optimisation.

Investment gold, on the other hand, functions differently. Coins and bars offer better price transparency but still involve storage and security considerations. Digital gold removes physical handling but relies heavily on platform credibility and regulatory safeguards. Exchange-traded funds provide liquidity and ease of trading, while sovereign gold bonds often offer interest earnings in addition to price appreciation. Each avenue carries its own mix of risk, taxation rules, and liquidity benefits. Understanding this distinction can prevent buyers from conflating emotional purchases with financial strategies.

Dasani said, “Instead of trying to perfectly time the market, investors should focus on allocation discipline. Gold is not a momentum trade; it is a hedge against macro uncertainty and currency volatility. If gold is underrepresented in your portfolio, gradual accumulation through staggered buying makes sense. However, aggressive lump-sum buying after a sharp rally can expose investors to near-term volatility. Ideally, gold should constitute around 10-15% of a diversified portfolio depending on risk appetite.”

Rathod stressed that gold is a “long-term asset used for stability, not quick profit”. “Instead of investing all money at once, gradual buying over time helps manage price risk. Many financial experts suggest keeping about 5-15% of total investment in gold for diversification. Even when prices are high, staggered investment can give a better average cost. Timing the exact bottom is difficult, so disciplined and long-term investment is usually more effective.”

What About Those Who Want To Sell Gold?

Rathod pointed out that selling gold should depend on financial needs and portfolio balance. “If gold becomes a large share of total investment after the price rise, partial profit booking may be reasonable. Selling may also be needed for planned expenses.”

However, selling during small price declines is usually not necessary, he added. A gradual selling approach can help achieve a better average price. Gold is generally held for long-term stability, so decisions should be based on financial goals, not the short-term price movement.

Dasani also echoed similar views. He said selling decisions should be “allocation-driven, not price-driven”. “If gold has rallied sharply and now exceeds your intended portfolio allocation, partial profit booking can be prudent. However, exiting completely may not be wise, especially in an environment of global uncertainty and shifting monetary cycles. Gold plays a strategic role as a hedge during market stress. Unless there is a pressing liquidity requirement, trimming exposure gradually is more sensible than making an emotional exit.”

Market analysts generally caution against interpreting early corrections as definitive downturns. Gold historically moves in cycles influenced by inflation, currency trends, and geopolitical stress. Short-term fluctuations can be sharp, but long-term trajectories tend to stabilise as global uncertainties resurface. Many experts suggest that while prices may cool in the near term due to currency realignments or profit-booking by institutional investors, the broader outlook remains tied to inflation hedging and reserve diversification.

Is This The Right Time To Invest In Gold?

For the middle class, a softening gold price brings mixed emotions. On one hand, it offers relief to families planning weddings or festive purchases. On the other hand, investors who bought at peak levels may worry about temporary erosion in value. The decision to buy or wait often depends on financial priorities rather than purely market signals.

Gold remains relevant as a portfolio diversifier, but timing should be staggered, highlighted Dasani. “Investors today have multiple options beyond physical gold—Gold ETFs, Gold Mutual Funds, and Sovereign Gold Bonds (when issued). Financial gold is generally more efficient and transparent. Instead of making a lump-sum allocation at current levels, systematic accumulation over months can reduce volatility risk while ensuring exposure to long-term structural drivers supporting gold.”

Rathod says gold can be included in a balanced portfolio when investment is done gradually. “Gold ETFs provide easy buying and selling through the stock market. Sovereign Gold Bonds offer gold price returns plus 2.5% yearly interest but require long-term holding. Physical gold provides ownership but includes storage and spread costs. Investors usually keep a limited portion of their portfolio in gold for stability,” he explained.

Gold Coins Vs Jewellery vs ETF vs Bonds: Risks, Charges Explained

 

Rathod says for investment purposes, gold coins or bars are “usually better than jewellery”. “Jewellery includes making charges and wastage, which reduce resale value. Coins and bars usually have lower additional costs and clearer purity through hallmark certification. Jewellery is more suitable for personal use rather than investment. If the objective is price exposure or wealth preservation, investment products like coins, ETFs, or bonds are generally more efficient.”

Gold ETFs provide high liquidity, transparent pricing, and no making charges, though they carry a small annual expense ratio, said Dasani. “They are suitable for tactical or flexible allocations. Sovereign Gold Bonds offer an additional 2.5% annual interest and capital gains tax exemption if held till maturity, making them attractive for long-term investors. However, SGB liquidity in secondary markets can be limited, and new issuances depend on government schedules. Choice depends on liquidity needs and investment horizon.”

Ultimately, gold’s enduring appeal lies in its ability to act as a stabiliser rather than a quick-profit vehicle. While short-term price movements capture headlines, its true strength has historically been in long-term wealth preservation and portfolio diversification.

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