Hyderabad: Gold silver prices in the domestic market surged sharply over the past year, with 24-carat gold rising to ₹58,750 per 10 grams and silver climbing to ₹1,49,300 per kg, triggering fresh debate among investors on whether the rally will continue in 2026 or face a correction.
The sharp rise pushed both precious metals to all-time highs, driven by a combination of global economic uncertainty, inflationary pressures, and strong investment demand. Market experts said investors increasingly shifted funds from volatile equities to safe-haven assets such as gold and silver during periods of heightened risk.
Analysts noted that persistent inflation and ongoing geopolitical tensions could further fuel gold silver prices. However, they cautioned that a strengthening US dollar or easing global tensions may lead to temporary corrections in the coming months.
At the same time, sustained buying by central banks, along with steady demand from Indian and Chinese households, continued to support gold prices. Experts added that this trend provided long-term stability to precious metal investments despite short-term volatility.
Gold silver prices driven by global rates, demand and geopolitics
Market participants attributed the rally partly to interest rate cuts by the Federal Reserve, which reduced benchmark rates to the 3.50–3.75% range last year. The softer rate environment weakened the US dollar and boosted global demand for gold.
Geopolitical tensions in the Middle East and the prolonged Russia–Ukraine conflict also pushed investors away from riskier assets, strengthening gold’s appeal as a safe store of value. In addition, large-scale purchases by central banks, including the Reserve Bank of India, increased gold reserves as a hedge against global volatility.
Silver prices, meanwhile, were supported by strong industrial demand. Experts said silver usage in solar panels, electric vehicles, and artificial intelligence infrastructure continued to rise, while supply growth remained limited. The classification of silver as a critical mineral by the US and restrictions on exports by China further tightened availability.
Over the past five years, silver delivered nearly 300% returns, rising from ₹65,604 per kg in December 2020 to around ₹2.50 lakh. Gold also gained strongly, climbing from ₹49,712 to about ₹1,41,700 per 10 grams, offering returns close to 190%.
In comparison, equity investments delivered moderate gains. A ₹1 lakh investment in the Nifty 50 index in 2020 would now be worth about ₹1.94 lakh, with the index gaining around 8–9% last year.
Experts advised investors to remain prepared for volatility, noting that while long-term fundamentals for gold and silver remained strong, short-term price swings were inevitable.
