 "Gold delivers historic 60% rally in 2025 - Will the glitter last in 2026?")
Gold investors have enjoyed a dream run in 2025, with the yellow metal soaring more than 60%—its best annual gain since 1979, according to Axis Direct’s latest 2026 outlook report. The spectacular rally has prompted a critical question for Indian investors: Can gold continue to shine in 2026, or is the metal entering overheated territory?
Axis Direct’s analysis suggests that while the structural uptrend remains solid, the coming year could be marked by sharper volatility, sensitive to policy moves, geopolitics, and global liquidity conditions.
Why Gold Boomed in 2025
The report highlights five major forces that propelled gold to record levels in 2025
1. US Political Turbulence and Tariff Wars
President Trump’s repeated pressure on the US Federal Reserve to cut rates, coupled with aggressive new tariffs, created global uncertainty—pushing investors toward safe-haven assets.
2. Consecutive Fed Rate Cuts
The Fed cut rates in September and October 2025, with one more expected in December. Falling US yields significantly boosted gold’s appeal.
3. Central Bank Buying at Record Levels
Countries added 1,180 tonnes of gold to their reserves last year and are on track for 1,000 tonnes in 2025—providing strong base demand.
4. Global De-Dollarisation Momentum
More central banks diversified out of the US dollar, accelerating gold accumulation as a strategic reserve asset.
5. Surging ETF Inflows
Global gold ETFs absorbed heavy inflows all year, signalling growing institutional conviction.
What Could Drive Gold Even Higher in 2026
Axis Direct outlines several tailwinds that could push gold to fresh highs next year
- Hyperinflation risks if central banks, especially the US Fed, print more money to service ballooning debt.
- Acceleration of de-dollarisation, strengthening gold’s reserve-currency role.
- Continued ETF inflows, keeping upward pressure on prices.
- More rate cuts from the Fed in early 2026, reducing real yields.
- A volatile geopolitical backdrop spanning the Middle East, Ukraine, and US–China trade relations.
- These combined could sustain gold’s multi-year supercycle.
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But the Rally Could Stall If…
- The report also flags risks that may derail gold’s upward momentum in 2026
- A hawkish pivot by global central banks if inflation remains sticky.
- A strong US dollar rebound, which historically suppresses gold prices.
- Weakening central bank purchases, particularly from China and emerging markets.
- Calmer geopolitics, reducing safe-haven demand.
- Strong performance in equities, tech, and crypto, pulling capital away from bullion.
- Falling physical demand from India and China due to high prices or tighter import rules.
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For Indian investors, especially, a weaker rupee and elevated import duties could temporarily squeeze domestic demand.
Gold continues to display a strong structural uptrend on the monthly timeframe.
Technical View: Gold Still in a Structural Bull Market
The monthly chart in the report shows a powerful breakout above ₹1,01,500–₹1,06,000, followed by a sharp rally to new highs near ₹1,32,000 per 10g on MCX
Key Technical Levels
Immediate support: ₹1,02,000
Secondary support: ₹95,000
Upside potential: ₹1,40,000–₹1,45,000 by end-2026
Axis Direct’s Strategy
Investors may accumulate on dips between ₹1,08,000 and ₹1,17,000, targeting ₹1,40,000–₹1,45,000 before December 2026.
This suggests gold could still generate mid-teens returns from current elevated levels.
What it means for investors:
The 2025 gold surge is unlikely to repeat in the same magnitude—but 2026 still looks favourable for moderate gains.
Who Should Increase Gold Allocation
- Investors seeking portfolio stability ahead of global elections and geopolitical risks.
- Those expecting more Fed rate cuts in early 2026.
- Anyone hedging against INR depreciation.