After delivering exceptional returns in 2025, gold and silver have transformed from portfolio hedges to potential core holdings. The precious metals rally continues gaining momentum, with market experts now setting even more ambitious price targets while acknowledging evolving market dynamics.

Structural Forces Drive Long-Term Bullish Outlook

Early bulls who predicted gold's rise are doubling down on their forecasts. Edward Yardeni, president of Yardeni Research, and private investor Naresh Katariya, who flagged the possibility of gold reaching $4,000 when prices hovered near $2,950 nine months ago, now see even higher targets ahead.

"A lot of investors who didn't do well in 2025 have realised gold was the more stable place to be," Yardeni said, pointing to Chinese investors affected by property losses and volatile equity markets as fresh sources of demand. He now sees gold potentially reaching $6,000 by year-end and $10,000 by decade-end, driven by portfolio rebalancing rather than traditional valuation metrics.

Central Bank Buying Remains Key Support

Central bank purchases continue supporting gold prices, even with moderated pace. Latest estimates show disclosed purchases at around 800-900 tonnes in 2025, slightly below the 1,000-tonne average of recent years. However, unreported buying may understate actual demand.

The shift toward physical control reflects growing geopolitical sensitivity, with India alone repatriating over 300 tonnes in the past five years.

Global Ownership Remains Surprisingly Low

Despite recent gains, global gold ownership outside India remains minimal. Goldman Sachs estimates total US investor exposure at just 21 basis points, contrasting sharply with Morgan Stanley's CIO recommendation of 20% portfolio allocation.

Yardeni describes gold as a 'sleeper asset' that investors ignored for decades in favour of stocks and bonds. This changed decisively after gold broke above $2,000 in 2024, triggering broader institutional interest.

Silver Faces Mixed Dynamics Ahead

Silver's trajectory may prove more volatile than gold's steady ascent. Commodity expert Anuj Gupta expects short-term volatility as global indices rebalance, potentially reducing silver weightings while increasing exposure to energy and industrial metals like copper.

Despite rebalancing pressures, Gupta doesn't expect deep corrections. Rising allocations to industrial metals could indirectly support silver given its manufacturing and electronics applications.

Investment Strategy: Measured Approach Recommended

Experts maintain their cautious optimism while acknowledging the changed landscape. The consensus continues favouring measured allocation strategies after 2025's substantial gains.

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

The strategy emphasizes buying on dips rather than chasing momentum, recognizing that while structural factors support higher prices, short-term volatility remains likely as markets adjust to new realities.

Silver, which emerged as one of the strongest-performing commodities in 2025, may experience intermittent corrections in 2026 despite maintaining robust long-term fundamentals, according to Saif Mukadam from ICICI Direct. The precious metal delivered an eye-catching 140% rally in 2025, but current elevated levels may not support fresh investment opportunities.

Silver Outlook: Strong Fundamentals, Cautious Near-Term View

Mukadam highlighted that while silver's structural and fundamental outlook remains positive, the dramatic price movement has created challenging entry conditions. "Structurally or fundamentally, silver prices should move on the upside, but as prices have moved drastically, the current levels are not supportive. The risk-reward ratio is not favourable, and we could see a pullback," he explained.

The analyst identified several key drivers that could influence silver's trajectory in 2026:

• Policy risks: Silver's inclusion in the U.S. critical minerals list raises concerns about potential tariff impositions
• Industrial demand: Continued structural demand from solar PV, electronics, AI chips, and data centre cooling applications
• Supply dynamics: Ongoing supply constraints supporting price levels

Although industrial demand flattened in 2025 after several years of strong growth, Mukadam believes long-term prospects remain favourable, advising investors to use short-term pullbacks as buying opportunities.

Gold Expected to Outperform Silver in 2026

After significantly lagging silver's performance in 2025, gold is positioned for relative outperformance this year. While silver surged 140%, gold rallied approximately 60% to 65% during the same period.

Mukadam outlined several supportive fundamentals for gold:

• Central bank buying activities
• De-dollarisation trends
• Fiscal concerns globally
• Expectations of multiple U.S. Federal Reserve rate cuts in 2026
• Continued role as hedge against geopolitical uncertainties

However, similar to silver, Mukadam cautioned against immediate entry at current levels, stating that "the risk-reward ratio is not favourable" and advising investors to wait for pullbacks before accumulating gold positions.

Broader Commodities Outlook

Beyond precious metals, Mukadam provided insights on other key commodities. Crude oil prices are expected to remain under pressure in 2026 due to global supply surplus conditions, with OPEC unwinding production cuts and pumping additional oil into the market. The analyst expects the market to remain in surplus by approximately 2 million barrels per day.

Copper, which surged 40–45% in 2025, continues to benefit from supply-side constraints including mine disruptions and low-grade ore challenges. However, policy uncertainty regarding U.S. tariffs on refined copper could trigger volatility. Among base metals, aluminium stands out as the most attractive option, with the market expected to remain in deficit as Chinese capacity reaches limits and several smelters shut down.