Gold Dhanteras demand holds after pullback

That support is coming from both global and domestic forces. A recent surge in oil prices tied to Middle East conflict pushed inflation expectations higher and shifted the market away from rate-cut bets, lifting bond yields and pressuring non-yielding assets such as gold. At the same time, the US dollar has remained a major headwind. The dollar’s recent strength has historically worked against bullion, and Adalytica’s US dollar trade signals now show extreme fear in the greenback, a sign that momentum has turned against the currency even as awareness remains high.

Central banks are also providing a durable floor. Annual official-sector gold purchases have stayed near 1,000 tonnes in recent years, reflecting reserve diversification away from the dollar and concern over sanctions risk. That structural demand has helped offset periods of investment outflows and gives bullion a different demand profile than many commodities, which are more tightly linked to the economic cycle.

The Indian currency adds another layer to the Dhanteras story. The rupee’s slide to around 96.73 per dollar from 89.85 at the start of 2026 has lifted landed gold costs for domestic buyers, cushioning prices even when international bullion softens. That matters in a market where India imports most of its gold and where festival-season demand is highly sensitive to local price moves.

The market backdrop is visible in bullion-related vehicles as well. GLD has fallen from this year’s highs but is still trading above the 50-day average, while GDX, the miners ETF, has also recovered from its lows and sits near its 50-day line. Adalytica’s Gold Fear & Greed Index shows fear at 23, with awareness at the maximum reading, a combination that typically reflects a market that is widely watched but still cautious about chasing strength after a big run.

The bullish case is straightforward: if the dollar weakens further, if the Fed shifts toward easier policy, or if geopolitics keep oil elevated, gold could regain upside momentum quickly. The bear case is just as clear: if global growth steadies, real yields stay firm and conflict risk eases, bullion could remain range-bound after a powerful multi-year advance. Even so, the current correction looks more like a reset than a reversal, which is why gold remains the preferred festive hedge for investors looking beyond Dhanteras.