Precious metals began 2026 with contrasting performances as silver extended its remarkable rally while gold opened largely flat on the Multi Commodity Exchange (MCX). The divergent price action reflects ongoing supply-demand dynamics and varying market sentiments for the two metals.

Silver Maintains Strong Momentum

Silver prices demonstrated continued strength as March futures contracts surged at the opening on January 1. The white metal's performance significantly outpaced gold, building on exceptional gains from the previous year.

The silver rally follows an extraordinary performance in 2025, with prices having jumped by more than 150% during the year. This exceptional run has been driven by tight supply conditions, rising demand, and a supportive interest rate environment.

Chinese Export Restrictions Impact

Market participants are factoring in the impact of Chinese export restrictions that came into effect on January 1, which are expected to influence silver prices during 2026. According to Manoj Kumar Jain of Prithvifinmart Commodity Research, this development has "fueled a record rally in silver," along with renewed geopolitical tensions between the United States and Venezuela.

The export restrictions represent a significant supply-side factor that traders are monitoring closely as they assess the potential trajectory for silver prices in the coming months.

Gold Outlook Remains Supportive

Despite the modest opening performance, gold continues to find support from expectations that real yields may remain constrained even as inflation moderates. Inderbir Singh Jolly of PL Wealth noted that such an environment has historically been supportive for gold prices.

Jolly added that while some consolidation is natural after a sharp run-up, the medium-term outlook remains positive, with gold expected to continue playing a critical stabilizing role in diversified portfolios heading into 2026.

Physical Market Rates

Physical gold prices across major Indian cities reflected the current market conditions on January 1:

The precious metals market's mixed start to 2026 reflects the complex interplay of supply constraints, geopolitical factors, and monetary policy expectations that continue to shape investor sentiment in both gold and silver.

Gold and Silver began 2026 on a cautious note in the domestic market, extending the corrective trend observed toward the end of 2025. This subdued start follows an exceptional year that delivered historic returns for precious metals investors, with current weakness attributed to profit-taking activities, weak global market cues, and thin liquidity as global exchanges observe the New Year holiday.

Current City-Wise Gold Rates

As markets opened on New Year's Day, gold prices across major Indian cities reflected the ongoing consolidation phase:

Chennai recorded the highest gold rates among metro cities at ₹1,35,930 per 10 grams for 24-karat gold, while Kolkata showed the most competitive pricing at ₹1,34,350 per 10 grams.

Silver Pricing Across Markets

Silver maintained relatively strong positioning despite the overall precious metals correction, with prices varying across cities due to local demand and tax variations:

Southern markets including Chennai and Hyderabad commanded premium pricing for silver, reflecting stronger regional demand patterns.

Exceptional 2025 Performance Review

The cautious New Year start contrasts sharply with the landmark performance delivered throughout 2025. Both precious metals achieved remarkable gains that significantly outpaced traditional asset classes:

Expert Market Analysis

Inderbir Singh Jolly, CEO of PL Wealth, highlighted that gold's strong 2025 performance reflected a structural shift in portfolio positioning by both investors and central banks. The rally received support from sustained inflows into exchange-traded funds, continued central bank buying for reserve diversification, and heightened geopolitical and macroeconomic risks.

Harshal Dasani, Business Head at INVasset PMS, emphasized that the recent correction should be viewed as a positioning reset rather than a breakdown of the long-term investment thesis. He observed that silver had particularly turned into a momentum-driven trade during 2025, making it vulnerable to profit-booking and leveraged unwinds once market sentiment softened.

Market Outlook

Rahul Kalantri, Vice-President (Commodities) at Mehta Equities, suggested that gold is more likely to enter a consolidation or sideways phase in 2026 following its strong rally. He noted that silver could continue finding support from strong industrial demand and energy-transition themes, though volatility is expected to remain elevated.

Jigar Trivedi, Senior Research Analyst at Reliance Securities, pointed to lingering geopolitical uncertainties and monetary policy expectations as factors that continue to underpin safe-haven demand for bullion, even as near-term price corrections play out.