Gold loan shares fall as much as 6% from October highs as sharp drop in precious metals sparks sell-off

Gold loan NBFC stocks came under pressure during Thursday’s trade, with both Muthoot Finance and Manappuram Finance down 3% and 1.45% respectively. Both stocks remained under pressure in recent sessions, with Muthoot Finance correcting 6% from its October highs and Manappuram Finance falling by a similar margin of 5%. These stocks, which have been riding a strong wave in recent months amid an unstoppable surge in the yellow metal, have now caught the bears’ attention as the gold metal stalled and erased some of its gains, driven by an improvement in investor risk-on sentiment. Although both stocks have given up some of their recent gains, they continue to trade with solid year-to-date returns. Muthoot Finance is up 49% year-to-date in 2025, while Manappuram Finance is up around 50% in the same period. Gold prices are down from ₹6,500 per 10 grams from the recent high. However, prices are still trading significantly lower than their recent highs. In Wednesday’s evening session, bullion lost about 5% of its value, the biggest one-day crash in five years, leading to a sharp decline of ₹6,516 per 10 grams from the recent peak, with experts attributing the sharp drop to profit-booking after an uninterrupted rally. Despite the recent pullback, gold remains up 58% year-to-date, supported by expectations of further easing from the Federal Reserve and continued geopolitical uncertainties, including reports that the planned Trump-Putin summit has been postponed after Moscow refused a ceasefire in Ukraine. Meanwhile, the US dollar index hovered near a one-week high, making dollar-priced goods more expensive. The prices, which rose more than expected, have so far outperformed all other asset classes in 2025. MCX gold has remained higher for nine consecutive months, with September posting the strongest monthly gain of nearly 13%. Local prices crossed the ₹1 lakh per 10 gram mark for the first time in July and have remained above it ever since. Gold is still considered a traditional hedge against uncertainty and inflation and tends to perform well in low interest rate environments as it is a non-yielding asset. Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or brokerage firms, and not of Mint. We advise investors to check with certified experts before making any investment decisions.