Trading in the new year began with a mixed performance for precious metals. On Thursday, January 1, silver prices showed resilience in early trade, supported by improved physical demand. In contrast, gold prices witnessed some selling pressure as investors chose to book profits, influenced by a firmer US dollar. Despite this, the overarching trend for both metals remains bullish, continuing from their historic rallies in the previous year.
Market Snapshot: Silver Holds Ground
Around 10 am on the Multi Commodity Exchange (MCX), the key benchmarks presented a split picture. MCX silver March futures were trading marginally higher by 0.06% at ₹2,35,842 per kilogram. On the other hand, MCX gold February futures were down 0.13% at ₹1,35,267 per 10 grams. The dip in gold was attributed to profit-taking by investors, though expectations of additional interest rate cuts from the US Federal Reserve helped cushion a steeper fall.
Recapping a Historic 2025 Rally
The year 2025 was exceptional for precious metals investors. According to MCX data, domestic spot gold delivered a staggering gain of ₹56,727, or 75%. It climbed from ₹75,913 per 10 grams on December 31, 2024, to ₹1,32,640 per 10 grams by the end of 2025. However, silver was the undisputed star, massively outperforming its yellow counterpart. Silver prices skyrocketed by ₹1,43,601, or an incredible 167%, from ₹85,851 per kg to ₹2,29,452 per kg over the same 12-month period.
Globally, the story was similar. Gold recorded its strongest annual gain since 1979, rising 66% in 2025. Silver logged its best year ever, soaring 165%. This powerful rally was fuelled by a combination of factors:
- Rate cuts and expectations of further monetary easing by the US Federal Reserve.
- Sustained and significant buying by central banks worldwide.
- Rising inflows into gold and silver Exchange-Traded Funds (ETFs).
- Heightened geopolitical uncertainty boosting safe-haven demand.
Silver received an additional boost from strong industrial demand, particularly from sectors like electric vehicles (EVs), solar power, semiconductors, and data centres. This demand surge coincided with tight supply conditions, creating a perfect storm for prices.
Expert View: Silver's Valuation Still Has Room to Run
Analysts point out that silver remains undervalued relative to gold. Apurva Sheth, Head of Market Perspectives and Research at SAMCO Securities, highlighted this disparity. He noted that historically, silver has traded at 2–3% of gold prices. "In 2025, silver traded at just 0.95% of gold prices, while currently it is around 1.65%, indicating there is still significant scope for catch-up after years of repression," Sheth explained. He added that growing interest from central banks, including Saudi Arabia, coupled with relentless industrial demand, supports further upside for silver even from current elevated levels.
Outlook for 2026: Can the Bull Run Continue?
The broader uptrend for both gold and silver is expected to extend into 2026. Key supportive factors include continued central bank purchases—exemplified by China buying over 400 tonnes of gold in 2025—and a deepening supply deficit for silver, driven by accelerating demand from the EV and solar industries.
However, the path may not be entirely smooth. Analysts caution that volatility could emerge if real interest rates rise sharply or if the US dollar strengthens materially against other currencies.
Sharing a technical perspective, Aakash Shah, Research Analyst at Choice Equity Broking, stated that gold's strong rally of over 65% has opened price targets in the range of $4,400–$5,000 globally, which translates to approximately ₹1,46,700–₹1,55,000 domestically. For silver, after breaching key levels and posting a 120% annual surge, it is positioned to potentially outperform gold further. Shah identified key support for silver at ₹2,11,600–₹1,80,000 per kg, with resistance seen in the ₹2,60,000–₹2,95,000 zone.
Disclaimer: The views and recommendations expressed are those of the individual analysts or broking firms mentioned, and not of the publisher. Investors are strongly advised to consult with certified financial experts before making any investment decisions.
