The precious metals rally that drove gold and silver to record levels continues to gain momentum, with market experts forecasting sustained price increases through 2026. However, investors are advised to prepare for increased volatility as speculative interest could trigger sharp price swings in both directions.

Expert Consensus Points To Continued Rally

A comprehensive poll of 10 commodity market participants reveals unanimous bullish sentiment for both precious metals. All respondents expect prices to continue rising, with 80% predicting silver will outperform gold during the year.

"Both metals are entering 2026 with strong fundamentals, though returns may normalise," said Naveen Mathur, director - commodities and currencies at Anand Rathi Shares & Stock Brokers. "Gold should continue to perform steadily while silver, despite higher volatility, may continue to outperform gold in percentage terms."

Silver Price Targets Show Aggressive Upside Potential

Market participants have set ambitious targets for silver, with 60% expecting international prices to reach at least $100.00 per ounce, representing nearly 40% upside from current levels of $72.00.

Performance Drivers Remain Robust

Gold has surged 62% supported by central bank buying, expectations of lower global interest rates, geopolitical uncertainty and a softer dollar outlook. Silver's even more impressive 144% surge reflects these same factors plus growing industrial demand shortages.

"Silver has the combined status of industrial and precious metal, which makes it more attractive," said Saumil Gandhi, senior analyst — Commodities at HDFC Securities. "Strong industrial and investment demand, combined with steady supply levels, has pushed the silver market into multiple years of deficit, and this trend will likely persist in 2026 as well."

Supply Constraints Support Price Outlook

Industrial applications in rapidly growing sectors including solar panels, electric vehicles and AI-related technologies continue driving silver demand. This industrial component distinguishes silver from gold and supports the outperformance expectations.

Previous analysis highlighted potential supply sources that could emerge at elevated price levels, including previously unviable mining operations and increased e-waste recovery. However, current market dynamics suggest demand growth continues outpacing these potential supply increases.

Investment Strategy: Cautious Optimism Recommended

Despite the bullish outlook, experts unanimously recommend measured approach to precious metals allocation. The consensus advises against rushing into positions after 2025's substantial gains.

"It's time to be cautious in allocation after the recent run up," said Navneet Damani, head of research-commodities & currency at Motilal Oswal Financial Services. "Buying aggression should be measured because bouts of correction (say be 7-10%) could come in. That should be the time to accumulate again."

The strategy emphasizes buying on dips rather than chasing current momentum, acknowledging that speculative interest could create sudden reversals alongside the expected upward trajectory.

Gold prices experienced a notable decline on Wednesday, December 31, as MCX gold futures dropped ₹1,140 or 0.8% from their previous close, highlighting the volatile nature of precious metals trading amid shifting global dynamics. The retreat came after a period of sharp volatility triggered by multiple geopolitical developments that had initially boosted safe-haven demand.

Price Movement and Market Dynamics

The domestic gold market saw significant movement as detailed in the following table:

Gold and silver had rebounded strongly on Tuesday from intraday lows due to renewed safe-haven demand. The sentiment was driven by multiple geopolitical factors including setbacks in the Russia-Ukraine peace process, U.S. strikes on Venezuelan dockyards, and Chinese naval drills amid rising U.S.-Taiwan friction.

Federal Reserve Policy Impact

Rahul Kalantri, VP Commodities at Mehta Equities, noted that the rally was capped following the Federal Reserve's policy meeting minutes, which indicated reduced expectations of aggressive rate cuts in 2026. This monetary policy shift has created a more complex environment for precious metals, balancing geopolitical support against potential headwinds from interest rate expectations.

Technical Analysis and Support Levels

According to Ponmudi R, CEO of Enrich Money, technical indicators continue to suggest underlying strength despite the recent decline:

The analysis indicates that while short-term price action remains under pressure, the broader structure is still viewed as bullish. Technicals continue to favor buy-on-dip strategies, though short-term movements remain sensitive to global developments.

Long-term Outlook and Projections

Analysts maintain a constructive view on gold's prospects for 2026. Mahendra Luniya, Chairman of Vighnaharta Gold, provided specific targets for the precious metal:

With global uncertainties and monetary policy expectations still evolving, the precious metals market remains finely balanced heading into the new year. Price action may remain range-bound in the near term, with traders closely monitoring shifts in geopolitical developments and central bank policy narratives that could influence the next directional move in gold prices.