Gold prices took a quick turn lower on Dec 29, erasing gains from earlier in the week and sending the shares of major gold‑linked lenders down about 2%.
Gold price correction
After touching a lifetime‑high of around ₹1,40,465 per 10 grams, February‑expiry gold futures on the MCX slipped to roughly ₹1,37,646, a drop of almost 2%. Futures for April, June and August expiries also fell.
Gold financier stocks feel the impact
Manappuram Finance, IIFL Finance and Muthoot Finance all slipped more than 2% from their intraday highs, mirroring the metal’s pull‑back.
Recent rally highlights
- Manappuram Finance hit a 52‑week high of ₹318.90 on Dec 26, up about 89% in the past 10 months and over 62% so far in 2025.
- Muthoot Finance reached ₹3,890 on Dec 24, climbing roughly 98% in eight months and about 70% year‑to‑date.
- IIFL Finance peaked at ₹607.55 on Dec 26, gaining 117% in nine months and up around 42% in 2025.
Why it matters for investors
Higher gold prices usually boost the value of the collateral that these lenders hold, lowering default risk. When the metal falls, the collateral’s value drops, which can tighten loan‑to‑value ratios and put pressure on the lenders’ earnings.
Takeaway: Keep an eye on gold’s direction if you own or plan to buy shares of gold‑financing companies. A sharp correction can quickly reverse recent gains.
Remember, this is just an overview, not a prediction. Do your own research and consider your risk tolerance before making any decisions.