After huge surge in 2025, experts suggest gold, silver can rally more

Gold and silver delivered their strongest returns in decades in 2025. While sharp swings and profit booking signal near-term risks, experts say macro factors may still support prices in 2026

5 min read Last Updated : Dec 31 2025 | 11:18 PM IST

For investors of gold and silver, 2025 has been the best year after record returns of 1979. While the precious metals have seen some pullback this week, led by some profit-booking, experts suggest that gold and silver could see their rallies continue in 2026.

The returns in 2025 have been the highest after 1979 in US dollar terms, and the highest in rupee terms post-1996, since when data is available. In the last five decades, 1979 and 2011 saw the sharpest rally in gold and silver, followed by a steep reversal.

In 2025, gold returned nearly 65 per cent in dollar terms and 76.7 per cent in rupee terms. However, the return from silver was almost 150 per cent in the international market, and about 170 per cent in India. It is worth noting that in 1979, a year when Hunt Brothers speculated heavily in silver, international silver prices went up 434.79 per cent, and gold was up 126.55 per cent.

However, the last two days (Monday and Tuesday) have seen wide fluctuations in both metals, especially silver, indicating a volatile trend in the near term. Experts advise caution, as both metals are overbought and due for a pullback. The prices of gold and silver should be used to add to investments, they add.

Nigam Arora, a US-based algo analyst and author of the Arora Report, said: “Macro factors favour higher gold and silver prices in 2026. However, gold and silver are very overbought now. When an asset is overbought, it is vulnerable to pullbacks. The Arora Report call is to buy the pullbacks.” Traders can hold core positions and trade around the core positions to take advantage of volatility, he added.

Volatility has been seen in the past few days, which is an indication of what is in store in the near future. On Monday, price of silver MCX futures went up in the morning to ₹2.54 lakh per kilogram (kg), before falling to a low of ₹2.22 lakh per kg on profit-booking. A day later, it again went up to ₹2.51 lakh, and on Wednesday morning, it opened at lower circuit (indicating no buyers) of 6 per cent. Profit-booking was due, say experts, as in the third week of November, silver was trading around ₹1.5 lakh per kg, and in just six weeks, it went up by ₹1 lakh to over ₹2.5 lakh a kg.

The gold-to-silver price ratio was 104.73 on April 21, 2025, and it fell sharply to 57 on Tuesday. The ratio indicates the relative strength of silver against gold. A higher ratio suggests weak silver and a strong gold in comparison. As the silver price rose sharply, the ratio fell. However, the fall has been very sharp and it has occurred in a very short time, suggesting that correction was very much due. The correction, however, may not have ended yet.

Gnanasekar Tyagarajan, founder of Commtrendz Research, a leading metal risk advisory firm, said: “While drivers of a bull run for both the precious metals are in place as 2026 sets in, investors are advised to watch the dollar, which has a chance to come back. Any strength in the dollar may be a deterrent for precious metals and provide overdue correction.”

Tyagarajan sees a recovery in the dollar in the second or third quarter of 2026. A high gold-silver price ratio, and imbalance in cash and futures markets are other factors that could bring in correction in prices. “We see limited upside for both metals in 2026. Technically, gold could rise to $4,700-4,800 and silver to $85 per ounce,” Tyagarajan added. Currently, international gold and silver are trading around $4,310 and $72 levels, respectively.

It is interesting to compare the rally in precious metals with the rally seen in 2011. Returns in 2025 in the international market are much higher as compared to the gains seen in 2010 and mid-2011. Both metals saw a sharp reversal in 2011, and took a long time to break their high levels. Will 2026 see a repeat of 2011?

Arora compared the scenario of 2011 and now. He said the Arora Report gave a signal to book partial profit in silver two days back, but not a signal to sell all of the silver and go short. In 2011, gold reversed from $1,900 and silver from $49. Silver took 14 years to see that level again while gold took a decade to scale the highs of 2011. The comparison of factors that impacted reversal in 2011 and now suggests that both metals have some steam left for a rally.