Gold has reached a fresh all-time high, touching more than ₹1.60 lakh per 10 grams (24K) as of Friday, continuing its remarkable rally that has seen the precious metal surge nearly 93% over the past year. The yellow metal's performance reflects its traditional role as a safe haven asset during periods of uncertainty, with investors flocking to gold amid various market challenges including rupee weakness, foreign institutional investor outflows, and geopolitical tensions.

ETF Rebound Signals Strong Market Interest

Gold and silver exchange-traded funds (ETFs) staged a sharp rebound on January 23rd, rising by as much as 17% after a brief correction. This bounce occurred just one day after a steep fall following a record rally, as tariff worries eased among investors.

While ETFs remain below their recent peaks, the underlying precious metals have continued racing to new lifetime highs, demonstrating the sustained demand for these assets.

Goldman Sachs Raises Price Target Significantly

The powerful rally has received strong validation from Goldman Sachs, which raised its end-2026 gold price target to $5,400 per ounce, equivalent to approximately ₹1.75 lakh per 10 grams. This represents a notable upgrade from the investment bank's earlier forecast of $4,900 per ounce (about ₹1.59 lakh per 10 grams).

The more-than-10% upward revision reflects what Goldman Sachs identifies as a structural shift in demand patterns, with the brokerage believing that private investors and emerging-market central banks are steadily diversifying away from traditional reserve assets.

Key Demand Drivers Supporting Higher Prices

Goldman Sachs' optimism rests heavily on several fundamental factors driving sustained demand. Private-sector investors are increasingly using gold as a hedge against global policy uncertainty and are unlikely to unwind these positions anytime soon, particularly heading into 2026. This consistent demand has repeatedly pushed prices beyond earlier estimates, effectively lifting gold's base level for long-term pricing.

Support is also expected from Western markets, where gold-backed ETFs previously experienced outflows during high interest-rate phases. These funds could witness renewed inflows as the Federal Reserve pivots toward easier monetary policy, with Goldman Sachs expecting the Fed to cut rates by around 50 basis points in 2026.

Central bank purchases remain another key pillar of support:

• Goldman Sachs projects average purchases of about 60 tonnes in 2026
• Demand largely driven by emerging economies
• Focus on reserve diversification amid geopolitical tensions
• Response to shifting global power dynamics

Potential Risks and Market Outlook

Despite the bullish outlook, Goldman Sachs has identified potential risks that could impact gold's trajectory. If long-term uncertainty around global monetary policy fades, it could trigger profit-taking by macro investors, potentially weighing on prices and diminishing some of gold's rally momentum.

The precious metal continues to benefit from strong momentum, supportive macroeconomic conditions, and institutional interest. However, its outlook will likely remain sensitive to shifts in global monetary policy, investor risk appetite, and geopolitical developments going forward.

Gold and silver exchange-traded funds experienced a dramatic recovery on January 23, resuming their record rally after significant volatility in the previous trading session. Market analysts are now weighing in on optimal allocation strategies between these precious metals amid heightened market uncertainty.

Sharp ETF Recovery Highlights Market Volatility

Tata Silver ETF demonstrated remarkable resilience, rebounding over 17% to hit a day high of ₹33.00 per share after crashing up to 24% yesterday to a low of ₹25.56. This recovery represents a substantial 29% jump from the ETF's previous session low, highlighting the extreme volatility characterizing silver investments.

Groww Gold ETF emerged as the top performer among gold ETFs, jumping 7% to trade at ₹155.97 per share. According to Justin Khoo, Senior Market Analyst - APAC at VT Market, this sharp surge in both gold and silver ETFs reflects aggressive investor repositioning toward safe-haven assets amid heightened global uncertainty.

Silver's Exceptional Performance vs Gold's Steady Gains

Motilal Oswal Financial Services analysis reveals silver's extraordinary performance trajectory over the past 12 months. The white metal delivered an exceptional rally exceeding 200%, significantly outperforming gold's 80% rise during the same period, establishing silver as one of the strongest-performing assets globally.

This sharp outperformance has led to significant compression in the gold-silver ratio, falling from pandemic highs of 127 to approximately 50 at the beginning of 2025. The ratio reset suggests that while long-term precious metals outlook remains constructive, near-term risk-reward dynamics may be shifting in favor of gold.

Analysts Recommend Strategic Reallocation

Despite silver's impressive performance, market experts are advocating for a more balanced approach. Navneet Damani, Head of Research Commodities, and Manav Modi, Commodities Analyst at Motilal Oswal Financial Services, emphasize that silver's recent rally has increased near-term volatility while gold continues offering relatively better stability.

Key Investment Recommendations:

• Portfolio Allocation: 75% gold, 25% silver
• Strategy Focus: Risk-managed reallocation after aggressive silver moves
• Near-term Preference: Gold as steadier hedge in uncertain conditions
• Long-term View: Maintain silver exposure for structural upside potential

The brokerage maintains a positive outlook on both metals but suggests this risk-managed reallocation strategy following silver's outsized run. Silver continues to have long-term upside backed by industrial demand and tight physical market conditions, but increased volatility warrants cautious positioning.

Market Flow Patterns Support Gold Preference

Global investment flows further support the analysts' recommendations. Despite sharp price surges, global silver ETFs have experienced outflows exceeding 3.00 million ounces since early 2025, while gold ETFs witnessed comparatively steadier inflows. This pattern reflects investor preference for more defensive positioning amid market uncertainty.

Aditya Agrawal, Chief Investment Officer at Avisa Wealth Creators, advises long-term investors to consider staggered allocation within asset allocation limits, while short-term traders should remain cautious amid continued volatility. The strategic approach balances silver's long-term structural theme with increased gold allocation to manage near-term volatility and capture potentially stronger risk-adjusted opportunities.