Gold and Silver Outlook: Moderate Strength Expected in FY27 Amid Global Uncertainty
Precious metal prices in India are projected to maintain a moderately strong trajectory during the fiscal year 2026–27, driven by persistent global uncertainties. Factors such as geopolitical tensions, fears of escalating trade wars, and concerns over a potential global recession are anticipated to bolster demand for safe-haven assets like gold and silver. However, elevated interest rates could act as a constraint, preventing sharp price increases. This outlook follows a robust performance in the preceding fiscal year, FY26.
Strong Performance in FY26 Sets the Stage
In FY26, silver futures experienced a remarkable surge, jumping by Rs 1,41,431, which represents a 142.2% increase from Rs 99,461 per kg on April 1, 2025. Gold also saw a significant rise, climbing by Rs 60,258, or 67%, from Rs 90,503 per 10 grams over the same period. This substantial appreciation was fueled by multiple global factors, including trade tensions associated with Trump's tariff policies, geopolitical issues, aggressive buying by central banks, limited supply, and overarching economic uncertainty.
Aamir Makda, Commodity & Currency Analyst at Choice Broking, commented to PTI, "The outlook for gold and silver for fiscal 2026-27 will remain moderately bullish. Since the global economy is going through a rough patch due to geopolitical tensions, trade wars and fear of global recession, demand for safe-haven assets will rise."
Correction and Future Drivers
Despite the strong gains, prices witnessed a sharp correction towards the end of FY26. In March, gold declined by Rs 11,343, or 7%, while silver dropped by Rs 41,752, or 15% on the Multi Commodity Exchange. Regarding this downturn, Makda noted, "Historically gold's demand as a safe-haven asset will likely increase in the second phase of war situations when dollar gains get limited." He cautioned, however, that if interest rates in the US and other major economies remain elevated for an extended period, it could cap further upside in bullion prices.
Silver's exceptional performance in FY26 was underpinned by a supply shortage persisting for five years, rising demand from sectors like solar panels and electric vehicles, and increased investment through ETFs, which amplified price movements in the relatively smaller silver market.
Projections for FY27
Looking ahead to FY27, silver is expected to stay moderately strong. Domestic prices may fluctuate between Rs 2.75 lakh and Rs 3.5 lakh per kg, influenced by currency movements. In global markets, silver could trade in the range of $85 to $100 per ounce. For gold, central bank demand is anticipated to remain a crucial support factor, with purchases likely averaging 750–850 tonnes in 2026 and stabilizing in 2027.
Makda elaborated, "Economies such as India, Poland and Turkey will continue to lead the charge as they are replacing US dollar reserves with gold to bolster monetary sovereignty and hedge against geopolitical sanctions."
External Factors Influencing Prices
In the crude oil sector, supply is forecast to increase in FY27 due to higher production from non-OPEC countries and slower global demand. This development could reduce inflationary pressures, potentially exerting downward pressure on gold and silver prices. Additionally, a stronger rupee resulting from lower oil prices might make precious metals more affordable in India.
The US dollar is expected to remain volatile amid uncertainty surrounding Federal Reserve policy. A stronger dollar could particularly limit gains in silver. Overall, prices are likely to be supported by global risks, sustained central bank buying, and industrial demand, although volatility is expected to persist throughout the fiscal year.
