The year 2025 left investors in precious metals both exhilarated and astonished, as gold and silver staged a historic, record-shattering rally that few had anticipated. The relentless upward march of these metals has set the stage for a crucial question as we move into 2026: can this unprecedented bull run sustain its momentum?
The Unprecedented Rally of 2025: By The Numbers
The performance statistics for 2025 are nothing short of extraordinary. Gold concluded the year at $4,319 per ounce, registering an annual gain of approximately 65%. This marked its strongest yearly return since 1979, with the price setting around 52 new record highs during the year.
Silver, however, stole the show with an even more dramatic surge. The white metal skyrocketed by 148% in 2025, closing at $71.66 per ounce. Zooming out to a five-year perspective, gold has advanced 127% from $1,898, while silver has delivered a staggering 171% return, climbing from $26.40. A significant portion of silver's catch-up occurred in the latter half of 2025, where it rallied nearly 82% since August 27, compared to gold's 28% rise in the same period.
What Fueled the Meteoric Rise?
Experts point to a powerful convergence of structural, not just speculative, factors behind the rally. Praveen Singh, Head of Commodities and Currencies at Mirae Asset ShareKhan, identifies a mix of political concerns, geopolitical tensions, trade wars, and macroeconomic worries as key drivers. "Mounting global debt, reckless fiscal spending, and the debasement of currencies by central banks have made hard assets like gold and silver the natural assets of choice," he explains.
Abhilash Koikkara of Nuvama Professional Client Group emphasizes a fundamental shift. He states that gold has evolved from a passive safe haven to a crucial macro asset, propelled by rising central bank purchases, fiscal pressures in developed nations, and a broad move towards de-dollarisation. For silver, the rally is firmly grounded in 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," Koikkara notes.
Analysts also highlight a break in gold's traditional relationship with the US Dollar and yields. Threats to the dollar's reserve status, coupled with sustained buying by global central banks diversifying their reserves, have provided consistent support. Jateen Trivedi of LKP Securities adds that rupee weakness boosted domestic prices, while Maneesh Sharma of Anand Rathi points to a spike in Indian import demand before Diwali and consecutive US rate cuts since September as factors fueling the second-half rally.
Why Did Silver Outperform Gold?
The exceptional outperformance of silver is attributed to its dual nature as both a monetary and industrial metal. Singh explains that after gold's initial rally laid the foundation, investors piled into silver as a cheaper alternative. The gold/silver ratio collapsed from 105 in April to around 60 by year-end, close to its long-term average.
A major catalyst was China's announcement of export restrictions on silver, effective January 1, 2026, shifting from a quota to a license-based system for eligible producers. This exacerbated existing tightness. Nearly 59% of silver demand now comes from industrial uses—solar panels, EVs, AI infrastructure, and electronics—creating a structural demand layer. The market is in a deep deficit, with the 2025 World Silver Survey projecting a shortfall of 117.6 million ounces.
2026 Outlook: Where Are Gold and Silver Headed?
Looking ahead, experts remain broadly bullish but caution about volatility, especially for silver.
Maneesh Sharma expects gold to perform steadily, supported by lower global interest rates, geopolitical uncertainty, continued central bank buying, and a softer US dollar. "However, its gains may moderate as investors adjust to higher prices," he says. He predicts MCX Gold could test Rs 1,60,000-1,65,000 per 10 grams, while silver may reach Rs 3,25,000-3,50,000 per kg, albeit with higher volatility.
Praveen Singh projects gold to rise to $5,000 per ounce (approx. Rs 1,50,000) by end-2026, with silver reaching $85-$95 (approx. Rs 2,75,000-3,00,000). In more favorable scenarios, he sees potential for gold at $5,500 and silver surging to $125. "We expect gold to eventually rise to Rs 200,000 in the coming years, while silver may rise to Rs 500,000," he adds, warning of sharp corrections along the way.
Jateen Trivedi sets similar targets, with Comex gold aiming for $5,000-$5,200 and domestic MCX gold moving toward ₹1,50,000–₹1,55,000. For silver, he sees potential for $100–$110 on Comex and ₹3,00,000–₹3,25,000 per kg in India, driven by relentless industrial demand.
In summary, while the stellar bull run of 2025 sets a high benchmark, the fundamental drivers—geopolitical strife, de-dollarisation, central bank demand, and silver's industrial crunch—suggest the precious metals story is far from over in 2026. Investors, however, should brace for a potentially rockier and more volatile ride, particularly in the silver market.
