Gold is currently trading about 25% below its record high in January. Its price has fallen 6.3% in October. According to the WGC, gold is very close to its lowest level.

World Gold Council New Report

If you're planning to buy gold today for Dhanteras, this could be a great opportunity. The World Gold Council (WGC) says in a new report that gold prices may be nearing their interim bottom.

Gold has been trading in a narrow range amid recent turmoil in global financial markets, the US election results, and fluctuations in the dollar index. Experts believe this level could present a good buying opportunity for investors. Despite the recent decline in prices, the broader macroeconomic environment favors a recovery in gold prices.

The US Federal Reserve raised rates by 0.25% in September, and another increase (to 4.25%) is anticipated in December 2026. Despite this, the World Gold Council believes that gold is near its short-term bottom. This is because whenever inflation is uncontrolled and currency values ​​decline, investors turn to gold for protection against inflation. Furthermore, given the recent historic decline in the tech sector and chip stocks following the US elections, investors may be turning to gold to hedge against equity risk.

Gold is currently 10% below its 200-day moving average. According to the WGC, history shows that whenever gold falls this far and the dollar reaches its highest level, prices form an interim low and recover. Simply put, despite rising interest rates, inflation in the economy, declining stock markets, and geopolitical uncertainty are significant factors preventing gold from falling further.

Dollar index at its highest level

The US Dollar Index (DXY) is currently trading around 101.76. Typically, there is an inverse relationship between the strength of the US dollar and gold prices. Under current macroeconomic conditions, if the dollar index falls below its peak levels, gold becomes cheaper for global buyers, boosting both demand and prices in the international market. "Today, two of the three conditions are being met. Gold is trading well below its 200-day moving average, and the dollar has reached its peak. However, market positions remain significantly overbought," the report said.

What is the third condition?

Heavy positions built up by speculators or short-term traders in the futures market must be fully unwound. According to the WGC, speculative positioning remains at a very high level. Further reduction of these positions is essential for a sustainable and robust recovery.

According to the WGC report, since 2005, whenever at least two of the three conditions (which is the current situation) have been met in the gold market, gold has generated an average positive return of 4.2% over the following three months. However, when all three conditions are met simultaneously, gold has experienced a significant and sustained rally in 100% of cases. As mentioned earlier, two conditions have been met: the price of gold is below its 200-day moving average, and the dollar index is at its highest level. Only the third condition remains unfulfilled.