Gold outperformed everything in 2025: What investors should expect in 2026

Gold's big 2025 run sets up a steadier, more volatile year ahead for investors, says experts

Gold was the standout asset of 2025, outpacing equities, debt and even global safe-haven assets. Indian investors saw record-high prices, fuelled by geopolitical tensions, a weaker rupee and unprecedented central-bank accumulation. The all-time high for 24-carat gold (999 purity), according to the India Bullion and Jewellers Association (IBJA), was ~1,30,874 per 10 grams, reached on October 17, 2025. 

As 2026 begins, retail investors are asking whether these gains can sustain or whether the metal is due for a breather.

Why gold dominated 2025

A mix of global and domestic triggers created a near-perfect rally.

 

Saurabh Jain, co-founder and chief executive officer of Stable Money, said the “single biggest driver” was record central-bank buying, as countries such as China, Russia, Turkey and India added reserves to reduce dependence on the US dollar.

 

Real yields remained low due to US Federal Reserve rate cuts, prompting strong safe-haven inflows.

 

Adding to this, Nilesh D Naik, head of investment products at Share.Market (PhonePe Wealth), noted that central banks in emerging-market had been accumulating gold aggressively since 2022, especially after the freezing of Russian assets by Western countries. He also pointed out that global gold ETFs had purchased nearly 670 tonnes by October 2025, amplifying demand.

 

From a global markets lens, Ross Maxwell, global strategy lead at VT Markets, described 2025 as a “perfect storm”, with heightened geopolitical tensions, policy uncertainty, a softer dollar and worries over US inflation and government shutdown risks. Domestically, the rupee’s weakness and India’s wedding-season demand supported prices.

 

Hrishikesh Palve, director at Anand Rathi Wealth Limited, reinforces this picture, sourcing RBI data, showing that India increased its gold reserves by nearly 58 per cent over the past decade, mirroring the global de-dollarisation trend.  ALSO READ | Decade-long bull run: Ventura explains why gold may surge to $4,800 in 2026

Are valuations stretched going into 2026?

Despite the exceptional 67 per cent return in 2025, experts do not see gold as outright overvalued. 

Jain said gold enters 2026 “on a strong footing”, supported by the same tailwinds that drove last year’s rally. Rather than waiting for corrections, he recommended SIPs in Sebi-regulated gold mutual funds to average out volatility.

 

Naik, however, urged caution when comparing gold to equities. The Nifty 50-to-gold ratio currently sits at the lower end, he said, often signalling equities are relatively undervalued. Because gold lacks intrinsic cash flows, he advised sticking to asset-allocation frameworks rather than chasing momentum.

 

Maxwell described the recent correction as “healthy consolidation” and expects the broader trend to remain upward, provided gold holds its 2025 support levels.

 

Palve explained RBI data on the best-performing years for gold since 1990 shows that only 2025 delivered a supernormal 67.7 per cent return, and because such peak years are typically followed by cooler or even negative years, investors should expect limited upside and higher volatility in 2026.

What retail investors should do in 2026

 

Experts offered guidance across investor categories.

 

• First-time investors: Start small and build gradually. Jain suggested a 10-15 per cent allocation through SIPs in gold mutual funds. Naik and Swapnil Aggarwal, director at VSRK Capital, recommended disciplined, monthly exposure via gold ETFs or gold funds.

 

• SIP-style and former SGB investors: With sovereign gold bonds currently unavailable, Jain advised continuing disciplined accumulation through regulated gold funds. Aggarwal emphasised the value of SGBs for those who already hold them, owing to their 2.5 per cent interest plus price appreciation.

 

• Investors with large 2025 gains: Naik and Aggarwal suggested rebalancing back to original allocation bands. Jain said there was no need for aggressive exits, as gold still serves as a crisis-resilient hedge.

 

Palve added that gold may be viewed as a replacement for debt rather than equity, making a 20 per cent ceiling more appropriate for conservative portfolios.

 

“Investors may treat gold as a debt substitute with up to 20 per cent allocation, given its sentiment-driven nature and role as a long-term store of value, and choose products based on tenure, using gold ETFs or funds for short-term needs and sovereign gold bonds for long-term goals such as future family commitments” , he said.

Risks to watch in 2026

Experts highlighted several risks that could dampen gold’s momentum.

 

-Jain warned against unregulated physical and digital gold channels, citing purity and custody concerns. He also flagged the possibility of central banks slowing purchases or turning hawkish if inflation persists.

 

-Naik said easing geopolitical tensions and improved global economic sentiment could weaken demand.

 

-Maxwell highlighted the risk of stronger US real rates and a firmer dollar.

 

-Palve added that stabilising interest rates or reducing uncertainty could also cool prices.

 

-Even so, the long-term case remains intact, central-bank demand, safe-haven behaviour and India’s deep consumption base continue to support the metal.