After a two-year run of stellar gains, US traders are signalling far more modest returns for gold and silver in 2026, possibly driven by lower central bank purchases, a stronger dollar, and moderating safe-haven demand, according to experts.
Analysts and financial planners are warning domestic investors to brace for bouts of volatility next year, with corrections in silver likely to be sharper, even though expectations could shift with changes in global macro conditions—such as interest rate moves or rising economic uncertainty.
Trader bets on Comex, the world's most diverse derivatives marketplace, show they expect the most liquid gold futures contract to rise 3.4% and silver 3% by December 2026 from Wednesday’s (24 December’s) closing of $4,503 and $71.68 per troy ounce (31.10 gm), respectively, per Bloomberg data.
In 2025, Comex generic gold and silver futures rose 67.8% and 127%, respectively, from 1 January to 24 December, the data showed.
Indian gold and silver prices tend to mirror international prices as most domestic demand for both metals is met through imports.
Even as the Nifty 50 gave 12% returns in the current fiscal year (FY26) through 19 December, gold ETF (exchange-traded funds) prices surged 45% to ₹11,400 per gm while silver doubled to ₹200 per gm in the same period, based on the Securities and Exchange Board of India’s (Sebi’s) formula for ETFs using global benchmark London Bullion Market Association (LBMA) prices, excluding GST.
In the previous fiscal, gold and silver ETFs gave 35% returns, while the Nifty returned just 5%.
Calls for caution
Sensing the warning signs, analysts and financial planners have called for caution, especially as Indian investors continue to diversify portfolios through gold and silver ETFs.
Amol Joshi, founder of PlanRupee Investment Services, said a FOMO (fear of missing out) is driving incremental investments into gold and silver ETFs.
“However, no asset class can grow at such a breakneck speed,” he said. “We are advising clients with over 10-15% of portfolio allocation to gold and silver to bring their allocations back to those levels, and for those at 5-7% to take it to around 10-15% through systematic investment plans over the next 12-18 months,” he added.
Joshi also believes that gold will outperform silver in FY27. His view squares with traders from the US who expect a modest rise in the next fiscal.
“Gold prices rose sharply in 2025 due to geopolitical tensions, strong central bank buying, and expectations of rate cuts,” said Satish Dondapati, fund manager at Kotak Mahindra AMC. “In 2026, continued economic uncertainty and steady investment demand may support prices. However, easing geopolitical risks, a stronger dollar, or delayed rate cuts could cause short-term volatility and consolidation.”
Naveen Mathur, director for commodity, currency and Gift City IFSC at Anand Rathi, said most of the issues on deficit in silver were priced in while the safe haven buying for gold also could moderate with improving global macroeconomic prospects, a likely resolution of the Ukraine war and a stronger rupee.
“We are baking in a ₹95,000-1,00,000 per 10 gm price for gold and ₹1.75-1.80 lakh per kg for silver next year,” said Mathur. At the lower end of the range, that is 17% below the 19 December ETF price of ₹1,14,000 per 10 gm for gold and 15% below for silver from ₹200,000 per kg, as of 19 December.
However, he added that prices might initially rise because of “momentum buying” before consolidating later next year on likely profit booking by big traders.
The rupee factor
Mathur also said he expects the rupee to stabilise around 87-88 to the dollar next year, “with a likely improvement in global macros and geopolitical tensions”. The rupee is currently trading at 89.85 to the US dollar.
Indeed, Crisil chief economist D.K. Joshi said the rating agency hadn't changed its November-end forecast for the rupee from 88/$ by the end of the current fiscal. A weaker rupee makes gold and silver in local currency costlier versus gold priced in other currencies, as a majority of demand is met through imports.
A significant part of the gold price increase over the past few years was fuelled by central bank buying, which has reduced this year on account of rising prices. This could also moderate prices in the new year.
For instance, net purchases by central banks totalled 254 tonnes in the calendar year through October 2025, down from 270-280 tonnes net buying over the same period last year (2024) and over 350 tonnes in 2023, per trade lobby World Gold Council (WGC), which adds that the central bank buying has been “strategic” rather than “opportunistic”.