Sharp drop of 38% in gold prices expected in Odisha; may plunge below Rs 56,000

Gold prices could plummet by 38%, potentially sinking below Rs 56,000 per 10 grams, warns a report by US-based Morningstar. The report states that gold prices may experience a nosedive due to various international factors, including the tariff war declared by US President Donald Trump.

Bhubaneswar’s Rs 56,000 Forecast

A 38% crash within weeks—though speculative—would slash Bhubaneswar’s current Rs 90,660 rate to nearly Rs 56,000. Such a nosedive could devastate recent buyers and jewelers while benefiting bargain-seeking investors. However, Morningstar’s timeline spans years, not weeks, easing immediate panic.

“Gold prices are linked to global stock markets and central reserves of countries. A downward trend is expected owing to recent market volatility, but while a 38 to 40 percent dip may be difficult, gold prices in Odisha may dive down near Rs 75,000 in the near term,” said Bhubaneswar-based financial advisor Trinath Lenka.

Why a 38% Crash?

Morningstar strategist John Mills projects that the price of gold could fall to 1,820 USD per ounce globally from 3,080 USD, mirroring a 38% dip.

Morningstar attributes the expected slump to multiple global factors. Key among them are:

Rising supply: Gold production surged globally, with mining margins widening and Australia significantly boosting output.

Weaker demand: Central bank purchases are slowing. A World Gold Council survey shows that 71% of central banks plan to reduce or hold current reserves.

Market saturation: A 32% spike in mergers and acquisitions within the gold sector suggests peaking investor interest.

Trump Tariffs and Profit Booking Add Pressure

Recent geopolitical events, including Donald Trump’s announcement of reciprocal tariffs, have also rattled investors.

Despite fears of a global recession, markets saw profit-taking as tariffs were already priced in. Analysts from Kotak and LKP Securities highlighted a temporary dip in safe-haven demand due to easing tensions in Ukraine and the Middle East.

Uncertainty Ahead

As global markets balance supply gluts, demand shifts, and geopolitical risks, Odisha’s gold consumers face a wait-and-watch phase. Whether prices defy gravity or spiral downward remains tied to forces beyond local control.

It is worth noting that in the past few months, gold prices have been on a continuous upward trend. Within a month, the price of gold in Bhubaneswar rose by nearly Rs 6,000 and recently reached around Rs 93,000. However, in the last two days, the price of 24-carat gold has dropped by Rs 2,720, bringing it down to Rs 90,660.