Gold shines in 2025 with 60% rally; will safe-haven run continue into 2026?

While gold retains long term support from persistent Central Banks' purchases and safe haven demand, 2026 may bring bouts of correc on and vola lity.

After a blockbuster run in 2025, gold and silver are heading into 2026 as two of the most watched asset classes for investors. Gold has soared nearly 60% so far this year, while silver has doubled—up 100%—making 2025 one of the strongest years for precious metals in more than a decade.

 

According to Axis Mutual Fund’s annual outlook, gold continues to enjoy a structural support system that could keep prices buoyant into 2026—even though bouts of volatility are likely.

 

Key drivers for gold rally: 

• Rate Cut Expectations: Lower interest rate trajectory in the US bodes well for gold as it reduces the opportunity cost of  holding the non-yielding asset. We an cipate 1-2 more rate cuts in this cycle, as macroeconomic conditions stay uneven  and weakness persists in the labor market.

 

 

• Concerns about Federal Reserve’s independence: If the new Chair is aligned with Trump’s policy preferences, markets  would an anticipate a dovish stance, which may provide additional support for gold.

 

• Weaker US dollar: With US debt to GDP at 124%, concerns on the government debt levels have weighed on the US  Dollar. US Dollar index has depreciated ~8%* so far in 2025, which has worked in favour of gold.

 

Global uncertainty adding to Safe-Haven appeal:

• Macroeconomic uncertainty: Concerns about slowing global growth and sticky inflation, have reinforced gold’s role as a  store of value and volatility hedge. With inflation all above target levels in many economies, real interest rates may  remain low, strengthening the case for holding gold. 

 

• Geopolitical risks: Persistent geopolitical tensions remain an underlying factor boos ng safe-haven demand. In 2025,  gold prices were influenced by Russia–Ukraine conflict, Middle East turmoil, and broader geopolitical tensions.

 

Trade/tariff worries also increased the safe haven appeal.

• Changing guard at the Fed: Markets are closely watching the appointment of the next Fed Chair, adding a layer of policy  uncertainty that typically supports gold. 

• Japan’s Debt Market Turmoil: Rising Japanese Government Bond (JGB) yields, the end of yield curve control, and the  unwinding of the yen carry trade have led to broader risk aversion.

 

For the first time in nearly 30 years, central banks’ gold holdings overtook their holdings of US Treasuries—illustrating a decisive shift away from the dollar. Between 2022 and 2025, central banks bought gold at historically strong levels, with 2025 marking yet another healthy accumulation year. 

 

Gold Outlook

 

ETFs and Bar/Coins See Record Demand

 

Gold ETF assets hit an all-time record of $470 billion by Q3 2025.

 

Three consecutive quarters saw 300+ tonnes of bar and coin demand.

 

Will Gold Continue Its Run in 2026?

"As we enter 2026, many of the drivers that fuelled gold’s rally in 2025 may continue to provide support, however  investors need to be mindful of potential headwinds that may temper the momentum. Higher real yields, a stronger US  dollar, higher global growth, reduced inflationary pressures, and hawkish US policy stance may erode demand.  Additionally, profit-taking, weaker ETF inflows, commodity rota on into industrial metals and easing geopolitical risks  could also weigh on the prices. Overall, while gold retains long term support from persistent Central Banks’ purchases and safe haven demand, 2026  may bring bouts of correction and volatility. However, in the near term, we have a positive bias on gold, supported by  safe haven flows given the backdrop of global uncertainty," said Axis Mutual Fund in its report.

 

Axis MF expects continued tailwinds, though the rally could face intermittent corrections.

 

• Supportive Factors for 2026
• Geopolitical uncertainty
• Sticky inflation keeping real rates low
• Central bank diversification
• Weakness in global growth

 

Possible Headwinds

 

• Investors should be alert to:
• Stronger USD
• Higher real yields
• Global economic recovery
• Profit-taking after a strong 2025
• Weaker ETF inflows
• Rotation into industrial metals

 

The report flags bouts of volatility and correction as likely—but maintains a positively biased near-term view.

 

What investors should do? 

For investors, the combination of a volatile macro backdrop, inflationary risks, and weakening global growth underscores gold’s role as a portfolio stabiliser. Products such as ETFs, gold mutual funds, and Sovereign Gold Bonds (SGBs) continue to be efficient vehicles for long-term allocations.