Hyderabad: Indian stock markets and gold prices have moved higher together ahead of Dhanteras, with both benefiting from developments in global markets, including falling crude oil prices, a weaker US dollar and changing expectations around geopolitical tensions.
The BSE Sensex surged 2,008.61 points, or 2.60%, to close at 79,310.01 on Thursday, November 5, while the NSE Nifty 50 gained 576 points, or 2.40%, to settle at 24,536.60. Both indices extended their winning streak to six consecutive sessions, gaining more than 8% during the period.
Gold also extended its recovery. International spot prices rose 1.57% to $4,123.39 per ounce on Thursday, after touching an intraday high of $4,146.63, their highest level in more than two weeks, according to Reuters.
In the national capital, 24-carat gold prices rose by Rs 2,200 to Rs 1,48,800 per 10 grams on Thursday, inclusive of taxes, according to the All India Sarafa Association. The increase came ahead of Dhanteras on Friday (November 06), when purchases of gold and silver are considered auspicious.
The simultaneous rise in the two markets comes after the results of the US midterm elections, in which Democrats gained control of both chambers of Congress. The outcome has raised expectations of greater checks on the Trump administration’s policy decisions and a possible easing of tensions surrounding the US-Iran conflict.
What is driving the stock market rally?
The decline in crude oil prices has been one of the key factors supporting Indian equities. Brent crude futures fell 8.7% to settle at $94.62 a barrel on Wednesday, their lowest level since August 31, following developments in the US midterm elections that raised hopes of a possible de-escalation of the conflict with Iran. Although prices recovered to $97.56 a barrel on Thursday, they remained below Tuesday's closing level.
The relatively lower crude prices supported market sentiment, as a sustained decline in oil prices can help reduce India's import bill and ease inflationary pressures, given the country's dependence on crude oil imports.
Foreign investment flows provided additional support to the rally. Foreign investors bought Indian shares worth Rs 7,284 crore on Wednesday, their biggest single-day purchase since October 2025, according to provisional exchange data cited by Reuters.
Buying was broad-based across sectors on Thursday. The Nifty Financial Services index rose 4%, while the Nifty Auto index gained 4.14%. Fourteen of the 16 major sectoral indices ended higher, according to market data.
Why is gold rising at the same time?
Gold's recovery was supported by a weaker US dollar and falling US Treasury yields. The dollar declined to its lowest level since September 30, while the benchmark 10-year Treasury yield fell to a near two-month low.
Since gold is priced internationally in dollars, a weaker US currency makes gold cheaper for buyers using other currencies. Lower bond yields also make gold more attractive to investors, as the opportunity cost of holding the non-interest-bearing asset declines.
The decline in crude oil prices has also eased some concerns about inflation and the possibility of interest rates remaining higher for longer. This has supported gold prices by influencing expectations about the future direction of US monetary policy.
However, expectations of a US Federal Reserve rate hike have not disappeared. Markets were still pricing in an approximately 80% probability of a rate increase in December, according to the CME FedWatch tool cited by Reuters.
The developments surrounding the US midterm elections have therefore influenced both markets, but through different channels. Lower oil prices have supported Indian equities by easing concerns over India’s import costs, while the weaker dollar and lower bond yields have helped gold recover.
What does the gold rally mean for Dhanteras demand?
The recovery in gold prices comes at a time when jewellers are preparing for one of the most important buying occasions of the year.
In Delhi, 24-carat gold rose to Rs 1,48,800 per 10 grams on Thursday, compared with Rs 1,32,400 on Dhanteras last year, according to the All India Sarafa Association. This represents an increase of around 12.4% over the year.
Despite elevated prices, jewellers expect festive sales to grow. Surendra Mehta, national secretary of the India Bullion & Jewellers Association (IBJA), has projected a 12% increase in gold sales this Dhanteras. Nitin Kedia, national general secretary of the All India Jewellers & Goldsmith Federation (AIJGF), expects sales to rise by around 10% compared with last year's Dhanteras and Diwali season.