Mirae Asset suggests the recent pullback in gold prices is a potential entry point for long-term investors, despite pressure from rising US Treasury yields. While short-term volatility remains due to interest rate expectations, the firm cites structural support from central bank buying and strong Indian festive demand as key long-term drivers.
A Tactical Shift in Gold Outlook
Mirae Asset Investment Managers has identified the recent retreat in gold prices as a potential tactical opening for medium-to-long-term investors. After peaking earlier in 2026, gold prices have experienced a correction, primarily weighed down by the rising appeal of fixed-income assets. As of October 8, 2026, gold is trading near $4,141 per ounce, having touched lows near $4,110 earlier in the week. This price movement contrasts with the earlier highs seen in January, as investors react to a challenging interest rate environment.
The pressure on gold primarily stems from the performance of US Treasury yields. The 10-year US Treasury note recently climbed above 5.2%, creating a difficult environment for non-yielding assets like gold. When government bonds offer higher guaranteed returns, the appeal of holding gold—which does not pay interest—often decreases, leading to temporary price declines.
Structural Drivers Versus Rate Headwinds
Despite the immediate pressure from high yields, Mirae Asset suggests the fundamental case for gold remains intact. The firm highlights that central banks globally are continuing their accumulation of bullion as part of a strategy to move away from excessive reliance on the US dollar. This trend, often referred to as de-dollarisation, is a long-term structural shift that provides a consistent floor for global demand. Historical data shows that central bank buying is now significantly higher than the average seen in the previous decade.
For investors in India, the outlook is further supported by seasonal consumption patterns. The festive and wedding season, running through events like Navratri and Diwali, historically boosts physical demand for gold. This local demand often acts as a cushion against global price volatility, reinforcing gold's role as a portfolio hedge against macro-economic uncertainty.
Risks to Consider
Investors should remain cautious of the ongoing influence of the US Federal Reserve. As of early October 2026, market participants are pricing in an approximately 80-86% probability of a Federal Reserve interest rate hike in December. If the Fed maintains a hawkish stance to curb inflation, real interest rates could remain elevated, which would continue to challenge gold prices in the near term.
Additionally, a stronger US dollar often reduces the purchasing power of global buyers who use other currencies, potentially dampening demand. Geopolitical tensions, while historically supportive of gold, also introduce unpredictability, especially if they drive oil prices and inflation higher, which could complicate the Fed's policy path. The key monitorable for investors moving forward will be the trajectory of US Treasury yields and official commentary from the Federal Reserve regarding the December rate decision.