Gold price on Dhanteras: 60% return in 2025, 13% in 2026 – what’s the outlook for yellow metal for the next year?

What do historical returns on gold suggest and what’s the outlook for the next Samvat?

Gold and silver have entered the Diwali 2026 season after an extraordinary 10 months, and this journey has been significantly more volatile than 2025.Buying gold on Dhanteras is considered auspicious in many traditions. But the festive season comes at a time when gold prices have seen sharp corrections in recent months. Does that mean that gold has lost its glitter as an investment bet? Or are the current dips the right entry point?Beyond the festive season demand, gold continues to be a strong investment option and an important portfolio diversifier, say analysts.What do historical returns on gold suggest and what’s the outlook for the next Samvat? We take a look:

Gold vs Nifty returns over last 5 years from Diwali to Diwali

Historically, gold has generally performed better in the 30 days before Diwali than in the month that follows the festival period, according to a Motilal Oswal analysis. In fact, over the past 10 years, pre-Diwali returns were negative in 2016 and 2021, but the performance during the run-up to the festival has consistently outpaced post-Diwali returns.This seasonal pattern was quite noticeable in 2025, when gold prices rose nearly 20% and silver gained around 38% in the 30 days leading up to Diwali.The longer-term movement in domestic gold prices is equally noteworthy. Prices around Diwali have climbed from approximately Rs 30,000 in 2016 to nearly Rs 1.50 lakh in 2026, with the pace of gains accelerating significantly after 2019.Gold vs Nifty Returns Over Last 5-Years (Diwali-To-Diwali)

Source: Mirae Asset SharekhanAccording to Motilal Oswal, historical trends suggest that Diwali serves as a seasonal trigger for demand and investor positioning rather than an event that drives prices for just one day. The eventual scale of returns, however, continues to depend on the prevailing global macroeconomic environment.Not only that, if you see the price trend of gold from Diwali-to-Diwali over the last 5 years, the returns have comfortably outpaced that of Nifty in each year.But gold prices have seen big corrections recently. While compared to last year the returns are in green, it remains to be seen how the coming Samvat will pan out.

Gold’s meteoric rise and sudden fall

Spot gold prices have had a roller-coaster ride in 2026. Gold rallied sharply at the beginning of the year, reaching a fresh record high of $5,595/oz on January 29.Coming on the heels of a 65% gain in 2025, the rally lifted gold by nearly 30% year-to-date. The surge was driven by a combination of expectations of US Fed rate cuts, the debasement trade, de-dollarization, heightened geopolitical tensions, concerns over widening fiscal deficits and mounting public debt, and weakness in the US dollar. US President Donald Trump’s rhetoric over Greenland and forceful removal of the Venezuelan President added to geopolitical uncertainty.At the time, markets were pricing in nearly three Fed rate cuts by year-end.Then the script flipped!According to Praveen Singh, Head of Commodities at Mirae Asset Sharekhan, the outlook took an unexpected turn with the nomination of Kevin Warsh to succeed outgoing Fed Chair Jerome Powell.“Precious metals came under intense pressure as Kevin Warsh was viewed as an advocate of greater monetary discipline, with an emphasis on controlling inflation, maintaining currency credibility, reducing reliance on quantitative easing, and shrinking the Fed’s oversized balance sheet,” he tells TOI.That contrasted sharply with market expectations for a more accommodative Federal Reserve. The shift in expectations helped trigger a rapid unwinding of the crowded debasement trade, with precious metals peaking on January 29.The macroeconomic backdrop subsequently became even more challenging for gold.The US and Israel launched a joint attack on Iran on February 28, sending oil prices sharply higher. The resulting inflationary pressures forced the Federal Reserve to pivot from an accommodative policy bias toward a significantly more hawkish stance.“Market expectations of three rate cuts by year-end eventually gave way to pricing for three rate hikes. The Fed raised rates for the first time in more than three years in September, despite considerable political pressure. Higher real yields and a firmer dollar intensified the pressure on precious metals, with gold eventually falling to $3,870/oz in November, its lowest level in a year,” Singh explains.In India the fall in gold prices has been somewhat cushioned by the rise in excise duty to 15%.

What’s the outlook for gold in Samvat 2083?

Experts are confident about the yellow metal’s long-term bull run despite the sharp correction in recent months.“Gold’s longer-term structural drivers remain supportive. Fiscal deficits across major economies remain elevated, sovereign debt continues to rise, and central banks are accumulating gold as they diversify their reserves. At the same time, concerns surrounding the sustainability of AI-led investment, persistent geopolitical tensions and an increasingly polarized global order continue to underpin demand for portfolio hedges,” says Praveen Singh.He believes that the fiscal outlook is particularly important. With US public debt exceeding $40 trillion and annual interest payments above $1 trillion, concerns over long-term fiscal sustainability are unlikely to disappear quickly.“Persistent government borrowing and heavy sovereign bond issuance also reinforce concerns about currency debasement. Meanwhile, trade imbalances and growing geopolitical competition could accelerate efforts by some countries to diversify reserves away from the US dollar,” he says.Against this backdrop, Mirae Asset expects gold to regain its footing after the sharp 2026 correction.“Our 12-month target is $5,000/oz, implying upside of about 29% from the November low of $3,870/oz. A move toward $6,000/oz over a longer horizon cannot be ruled out if fiscal, geopolitical, and monetary risks intensify. Over the longer term, declining confidence in fiat currencies and persistent imbalances in the global monetary system could also result in gold assuming a larger role in global reserves and the evolving international monetary architecture,” he says.Motilal Oswal continues to maintain a buy on dips stance with an accumulation zone near $3800-3900.“Any dips should be utilised as a buying opportunity for the targets of $4200 on a short term basis and $4500- $4700 from a medium term perspective. Assuming USD-INR at 96, with a buy on dips stance, Rs 135,000 remains a good accumulation zone with Rs 1480,000 as a short term target and Rs 160,000 -1680,000 from a medium term perspective,” it says.(Disclaimer: Recommendations and views on the stock market, or any other asset classes or personal finance management tips given by experts and analysts are their own. These opinions do not represent the views of The Times of India.)