In India, the momentum was even more pronounced. MCX gold futures surged from around ₹75,000 to nearly ₹1,39,000–₹1,40,000 per 10 g, representing a rise of nearly 78%, while silver futures jumped approximately 144%, approaching the ₹2.5 lakh/kg mark. Domestic retail prices mirrored this trend, with both metals reaching historic highs amid safe-haven demand, robust industrial requirements, and a weakening rupee.
What supported gold and silver’s extraordinary gains in 2025?
Gold’s ascent was fuelled by a potent mix of macroeconomic forces and investor behaviour. Persistent expectations of U.S. Federal Reserve rate cuts lowered real yields, reducing the opportunity cost of holding non-yielding bullion. Simultaneously, the U.S. dollar softened, making gold more affordable for international buyers. Heightened geopolitical tensions, from Middle East conflicts to Venezuelan oil tanker blockades—fueled safe-haven demand. Sustained central bank purchases and record ETF inflows underpinned this rally, as institutions shifted reserves away from dollar assets toward bullion.
Silver outperformed with even greater brilliance, driven by both investment fervor and industrial demand. A structural supply deficit, now in its fifth consecutive year, tightened markets significantly. This shortage coincided with surging industrial usage in solar, EVs, electronics, and AI infrastructure, sending consumption to record highs. Meanwhile, silver’s official listing as a U.S. critical mineral, China’s strict export controls, and strong ETF inflows intensified the squeeze on available stocks. The combined impact of monetary easing, investor momentum, and real-world demand propelled precious metals to historic peaks.
Will gold move to $5,000 an ounce and silver to test $100 in 2026?
In 2026, gold may climb toward the $5,000/oz milestone. Major banks, Bank of America ($5,000), JP Morgan ($5,055), Goldman Sachs (~$4,900), and UBS (targeting $5,000 by Q3 and up to $5,400 in a bull case), forecast significant upside amid rate cuts, a soft dollar, central bank buying, and geopolitical risk. Survey data shows nearly 70% of institutional investors expect gold to rise, with 36% predicting it will breach $5,000 by the end of 2026.
Silver is not far behind, with strong momentum pointing toward a test of the $100/oz level. Technical breakouts, structural supply deficits, and surging green-tech and industrial demand are key drivers. While consensus forecasts cluster in the $70–90 range, multiple bullish scenarios envision silver reaching—or even exceeding—$100 if macro conditions remain favourable.
Demand and price outlook in India With global bullish momentum carrying into 2026, India’s bullion market is primed for further strength, especially as INR weakness adds another layer of support. Local gold prices may gravitate toward Rs 1.50 lakh per 10 g over the next 12-18 months, fueled by persistent macroeconomic stress and structural factors. Rupee depreciation amplifies this trend, making imported gold and silver costlier in local terms, boosting domestic prices, and attracting investors seeking currency-hedging opportunities.
Physical demand is likely to remain robust due to strong seasonal purchases and the growing trend of bullion as a wealth-preservation asset for households. Additionally, Indian policy reforms—such as allowing pension funds to invest in gold ETFs—are widening demand channels and institutionalising gold ownership. With central banks, retail consumers, and industrial users all contributing, physical offtake should stay elevated through 2026, reinforcing domestic prices amid global tailwinds and a softer rupee.
Investor strategy for 2026
For those already holding gold and silver, the outlook remains broadly positive, supported by global monetary easing, geopolitical uncertainty, and structural demand. However, after the spectacular 2025 rally, prudence suggests a balanced approach: book partial profits to lock in gains while maintaining core holdings as a hedge against volatility and inflation.
Preferred investment modes depend on individual goals. For long-term wealth preservation, physical gold and silver remain attractive, particularly in India, where cultural affinity and festive demand persist. For liquidity and ease of trade, gold ETFs and mutual funds offer advantages, including transparency and lower storage costs. Silver exposure can be diversified through ETFs or futures for those comfortable with higher volatility. Systematic investment in gold via monthly plans can also smooth out price fluctuations.
In short, investors should avoid chasing short-term spikes and adopt a disciplined strategy: retain a strategic allocation to bullion, use dips for accumulation, and leverage paper instruments for flexibility. Gold and silver will continue to shine, but smart positioning will define success in 2026.
(Hareesh V is Head of Commodity Research at Geojit Investments)
