Gold and silver price rallies in 2025 left investors gasping – the stellar run of the precious metals was unprecedented and many had not predicted such a steep rise in the prices of the yellow and white metals. But what happens in 2026? Will gold and silver continue their record breaking run this year as well?Gold prices had an exceptional year in 2025 continuing their bull run and witnessing around 52 new record highs while also the strongest annual returns since 1979. Gold closed at $4319 on the last trading day of 2025; thus, it gained around 65% last year, while silver surged 148% to $71.66.In the last five years, gold has rallied from $1898 to $4488; thus, giving a return of 127%, while silver in the same period surged from $26.40 to $71.66, which amounts to a return of 171%. So, in the last five years silver has outperformed gold, though the major catch-up play by silver happened in the second half of 2025. Since August 27 silver has rallied nearly 82%, while gold has been up by 28%.
Why did gold & silver rally so much in 2025?There were a multitude of factors that contributed to the stellar rallies in the two metals in 2025, and some of these are expected to continue to propel these precious metals to new highs this year as well.Praveen Singh, Head – Commodities and Currencies, Mirae Asset ShareKhan says that the stellar rally in the precious metals in 2025 has been driven by a confluence of strong fundamental factors including political concerns (rising social instability risk) , geopolitical tensions (fragmentation, slowdown in globalization, realignments of global powers initiating reset of geopolitical order), trade wars (risks to global economy, increased polarization), mounting macroeconomic worries as surging global debt and reckless fiscal spending, and debasement of currencies by central banks and governments in key economies have made hard assets ,like gold and silver natural assets of choice.
Abhilash Koikkara, Head – Forex & Commodities at Nuvama Professional Client Group explains, “In 2025, deep structural factors rather than merely short-term money speculation drove up the prices of gold and silver. Although short-term fluctuations have been influenced by the US Federal Reserve policy, the primary drivers were more fundamental.” According to Koikkara, the rise of gold signals a change in the world’s financial and monetary system. “Gold has evolved from a passive safe haven to a crucial macro asset due to rising central bank buying, mounting fiscal pressure in developed nations, and a general shift towards de-dollarisation,” he told TOI. Liquidity conditions, which had been tightening for over a year, began stabilising in early 2025 which is historically a favourable environment for gold.
On the other hand, silver’s rally, while aligned with macro tailwinds, is driven more directly by physical market fundamentals. “Structural supply deficits, accelerating industrial demand from electrification, renewable energy, AI, and electronics, along with robust investment inflows, have tightened the market. Unlike previous cycles, silver’s strength is grounded in consumption growth and supply inelasticity rather than speculative excess,” he says.In fact, Praveen Singh points out that the traditional relationship of gold with key drivers like US Dollar and yields has broken. “Threats to the reserve status of the US Dollar are multiplying due to US twin deficits, weaponization of the currency, trusts in US treasuries getting eroded and the US President Trump adopting ‘US first policy’,” he tells TOI.
Interestingly, global central banks continue to diversify their forex reserves as they reduce their dependence on the US Dollar by adding more gold to their reserves. “This diversification has been a key factor in boosting gold prices in recent years, especially since 2022 as the West confiscated nearly $300 worth of Russian assets in the wake of Russia-Ukraine war,” Singh adds.Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities says that rupee weakness has boosted the prices in domestic market, as rupee saw weakness of 5% this year. Dollar weakness, de-dollarisation themes, and concerns around global debt sustainability have increased allocation toward precious metals. Silver has also benefited from strong industrial demand linked to clean energy, EVs, and grid infrastructure, adding a structural demand layer to the rally.Maneesh Sharma, AVP – Commodities & Currencies, Anand Rathi Shares & Stock Brokers is of the view that the sudden spike in import demand from key consuming nations such as India prior to Diwali festival along with increased interest seen in Global ETFs were also behind the rally in second half of 2025 while 3 consecutive rate cuts seen in US since September onwards also kept the investment flows intact in Gold. Overall a supercharged geo-economic environment combined with dollar weakness kept the safe haven flows intact, he told TOI.But why did silver rally more than gold?Praveen Singh of Mirae Asset ShareKhan explains:
- Initially, it was gold’s rally that provided a solid foundation for silver to rally as a catchup play. Silver eventually built on gold’s rally to surge much more than gold as investors are piling into silver on the grey metal being a cheaper alternative. That silver is a much smaller counter as compared to gold; the former’s price action is usually quite sharp. As the key central banks, especially the US Fed, cut interest rates into elevated inflation, it is leading to inflation hedge buying.
- Long-term Gold/silver ratio (since 1970) is around 60; gold/silver ratio has plummeted from 105 in April to 60.24 on investors piling into silver as a cheaper alternative. China imposing export restrictions on silver exports from January 1, 2026, has also been a major factor behind silver significantly outperforming gold towards the end of the year.
- Investors’ interest in silver is visible in sharply rising global ETF holdings. Silver ETF holdings rose 21% YTD or by 147 Moz in 2027, which is equivalent to 4583 tons. As silver ETF demand soars, inventory dislocation amid steep inventory decline continues to keep the silver market tight, which is reflected in elevated lease rates. Lease rate is currently around 7% as compared to historical average of 0.3-0.5%.
Nearly 59% of silver is currently consumed for industrial purposes, making it highly susceptible to developments in solar energy, electric vehicles, semiconductors, artificial intelligence infrastructure, and electronics. “The World Silver Survey 2025 projects a deficit of 117.6 million ounces, extending a shortfall that has existed for nearly six years. These pressures have been exacerbated by investment demand. While investor positioning is still underdeveloped in comparison to historical peaks, ETF holdings have increased to 850 million ounces, the highest level in more than three and a half years. Silver is far more sensitive to favorable macro and liquidity changes than gold due to a combination of limited supply, growing industrial use, and increased financial demand,” he tells TOI.
Where are gold and silver headed in 2026?Maneesh Sharma of Anand Rathi Shares & Stock Brokers tells TOI that gold should continue to perform steadily, supported by expectations of lower global interest rates, geopolitical uncertainty, continued central bank buying, and a softer US dollar along with continued ETF inflows. “However, its gains may moderate as investors continue to adjust to higher prices.” Silver, on the other hand, despite higher volatility, may continue to outperform gold in percentage terms due to its dual role as both a precious and industrial metal, he said. “For the next one year, gold could deliver 25–30% returns on an annual average basis. Meanwhile Silver may still offer higher returns on an annual average basis but volatility with intermittent corrective moves could remain high in Silver as compared to gold,” he said.Between the two, silver has a higher probability of outperforming gold, especially in the first half of 2026, primarily due to persistent supply deficits and strong structural industrial demand from sectors such as Solar energy, EVs, AI infrastructure & electronics, he added.“In rupee terms MCX Gold futures could test Rs 1,60,000 – 165,000 / 10 gm on the higher side, while silver could witness levels of around Rs 3,25,000 – 3,50,000 / kg on the higher side in futures contract. However Silver always remains a highly volatile commodity with the market being less liquid & roughly 8 – 9 times smaller than the gold market, thus it always shows amplifying price moves as compared to gold,” he predicts. Praveen Singh of Mirae Asset ShareKhan tells TOI:
- Gold is expected to rise to $5000/Oz (Rs 150,000) by 2026-end. Silver is expected to rise to $85-$95 (Rs 275,000 to Rs 3,00,000) by the end of the year.
- In more favorable scenarios, we may see gold rising to $5500 (Rs 165,000) and silver surging to $125 (Rs 400,000). Silver can rise exponentially should China strictly follow its silver export restrictions which now would be license based instead of quota system. Only those Chinese producers with proven export track records, with capacity of more than 80 tons per annum and a $30 million credit line will be allowed to export.
- We expect gold to eventually rise to Rs 2000,000 in the coming years, while silver may rise to Rs 500,000, though trajectories could be punctuated with sharp corrections, long consolidations and huge volatility.
Jateen Trivedi of LKP Securities says Comex gold could target $5,000–$5,200, while MCX gold may move toward ₹1,50,000–₹1,55,000 per 10g, supported by rate cuts, central bank demand, and geopolitical hedging.“Silver could aim for $100–$110 on Comex and ₹3,00,000–₹3,25,000 per kg domestically, driven by industrial demand growth and continued investment interest,” he tells TOI.(Disclaimer: Recommendations and views on the stock market, other asset classes or personal finance management tips given by experts are their own. These opinions do not represent the views of The Times of India)
