Gold and silver prices moved in opposite directions during Asian trade, as profit booking weighed on gold while silver extended its sharp rally amid tightening physical supplies and structural market stress. Gold prices eased with spot gold falling 0.4% to $4,535.50 per troy ounce, while silver gained 3% to $79.87 per ounce.

Gold Faces Profit Booking Pressure

Jateen Trivedi, VP Research Analyst – Commodity and Currency at LKP Securities, said gold weakened as traders booked profits after the recent rally. The decline followed recent volatility after prices failed to sustain levels above key resistance zones.

According to Trivedi, gold remains volatile as markets reassess positions, with the US Federal Reserve's meeting minutes emerging as a key near-term trigger. He added that thin volumes during the US holiday period could keep price swings elevated.

Silver Continues Structural Rally

In contrast to gold's decline, silver prices continued their exceptional performance with spot silver gaining 3% to $79.87 per ounce. The white metal has crossed $75 on COMEX and rose above ₹2.30 lakh in the domestic market, marking gains of more than 160% for the year.

According to Motilal Oswal Financial Services Ltd.'s Commodities Insight report titled "Silver Unchained!!!", silver's rally reflects a structural shift rather than a conventional bull cycle. The report attributes the price surge to prolonged physical supply deficits, declining inventories, policy-led supply constraints, and sustained industrial and investment demand.

Supply Stress Drives Market Dynamics

Navneet Damani, Head of Research – Commodities at Motilal Oswal Financial Services, said the silver market moved into a structural phase driven by inventory depletion and physical scarcity. He pointed to a widening disconnect between paper pricing and physical availability, highlighting deeper stress in global price discovery mechanisms.

The report noted sustained drawdowns in silver inventories across major hubs, including COMEX and Shanghai, stressing a global shortage of deliverable metal rather than a regional imbalance. China's role as a major refiner and net importer has also influenced the market, with physical inventories falling to decade-low levels.

Manav Modi, Commodities Analyst at Motilal Oswal Financial Services, said persistent inventory declines and weakening arbitrage between Shanghai and COMEX have exposed limited availability of physical silver. He added that sustained premiums in physical markets reflect genuine supply tightness rather than temporary pricing inefficiencies.

Market Outlook and Targets

While Motilal Oswal noted that its initial COMEX silver target of $75 has been achieved, it reiterated a target of $77, equivalent to ₹2.46 lakh per kg in the domestic market, subject to evolving market conditions. Proposed export licensing requirements are expected to further restrict global supply from January 2026.

Despite gold's recent pullback, both precious metals have benefited from investors seeking safe-haven assets amid geopolitical tensions, concerns around US fiscal stability, and expectations of further interest rate cuts by the Federal Reserve, which have pressured the US dollar.

Gold has reinforced its reputation as a reliable safe haven asset, delivering extraordinary returns to investors over the past five years. The precious metal's remarkable performance has turned modest investments into substantial wealth, with prices surging over 250% between 2020 and 2025.

Exceptional Five-Year Performance

The numbers tell a compelling story of gold's appreciation. An investor purchasing 10 grams of gold at the beginning of 2020 would have paid ₹38,995, while the same quantity commanded ₹1,36,649 as of December 29, 2025, according to Bloomberg data.

This 250.4% appreciation over five years demonstrates gold's ability to multiply wealth significantly. An investor who allocated ₹1 lakh to gold in January 2020 would have acquired approximately 25.64 grams of the precious metal, now worth a substantial ₹3.5 lakh.

Decade-Long Growth Trajectory

Gold's impressive performance extends beyond the recent five-year period. Over the last decade, the yellow metal has surged nearly 431%, delivering returns more than five times its worth from 2015 levels. This consistent growth pattern has strengthened investor confidence in the commodity and validated its traditional role as a portfolio diversifier.

Market Outlook

Analysts maintain a constructive outlook for gold's prospects, citing several supportive factors. According to analysts at Amit Kedia Advisories, gold's structural drivers remain robust, including:

• Ongoing geopolitical risks
• Continued central bank accumulation
• Sustained ETF demand
• Strong long-term fundamental backdrop

However, analysts caution against momentum chasing, noting that some catalysts may gradually mature, potentially leading to intermittent corrections. A deeper correction of 15-20% remains possible if risk sentiment improves significantly or ETF flows reverse direction.

Investment Strategy Recommendations

For investors seeking gold exposure, experts recommend maintaining disciplined investment approaches. Key strategies include:

• Continuing exposure through gold ETFs
• Adopting systematic investment plans (SIP) to manage volatility
• Maintaining long-term perspective despite short-term fluctuations

Gold's performance over the past five years underscores its enduring appeal as both a wealth preservation tool and growth asset, particularly during periods of market uncertainty and economic volatility.

Analysts project further 10-12% upside with prices potentially reaching ₹1,50,000 per 10 grams, reinforcing the metal's continued attractiveness as an investment option.