The New Gold Rush: How the bull run in gold has turned into a full-fledged rally in all precious metals

When the carpenter James Marshal chanced upon some rocks that looked like gold in the American River in California in 1848, he sparked what history remembers as the Gold Rush. People from across the world headed to the still sparsely populated western coast of the US, where white settlers had just recently usurped land from Mexicans and Native Americans.

The world has transformed since then. The Bretton Woods system reintroduced the gold peg, anchoring the US dollar to the yellow metal. Richard Nixon brought that system down when he yanked the dollar off the gold peg on August 15, 1971, moving the world firmly into the era of fiat currency. Though some predicted a collapse of gold, the opposite happened, with the metal multiplying 10 times over the next decade amid geopolitical tensions and 1970s oil price shock, which sent inflation above 20% in a large number of oil-importing countries such as the US.

More than five decades later, the script is similar. US President Donald Trump’s tariff war, geopolitical tensions, and a slowing global economy have sparked a new gold rush, though nobody is stepping into rivers with pans this time around. Households, investors and central banks are chasing the yellow metal after a record-breaking rally in 2025. On the international spot market, gold traded at $4,479 per ounce on December 24, 2025, up from $2,633 on December 26, 2024.

Back home, gold has clocked more than 50 record price highs in the past year, surging 73% year-to-date to around Rs 1.31 lakh per 10 gms on December 19—its strongest rally in India since 1974.

Indian households, known for their love for gold, are estimated to own 34,600 tonnes of the metal. Their hunger for gold has withstood even governmental efforts to curb it, and seems unaffected by gold’s record run, as is evident from even a cursory reading of the import data.

Gold’s rally, though impressive, is nothing compared to the performance of other precious metals. Silver prices have jumped more than twice that of gold, thanks also to rising demand in new-age industries, from electric vehicles to solar energy equipment and hardware for data centres. Platinum and palladium have joined the party for similar reasons.

For an import-dependent country like India, this frenzy comes at a cost. As more forex gets drained out, imports aren’t getting cheaper, with the rupee touching record lows of 91 to the dollar in December.

Consider this, India imported nearly $58 billion worth of gold in FY25, which was a 27% jump over FY24. The country also imported $4.84 billion worth of silver, a slight dip from the nearly $5 billion the previous year. Worryingly, in value terms, gold imports have grown further in FY26. Till October end, the value of gold imports jumped 21%, even though volumes dipped 8%, thanks to the depreciating rupee.

There was some respite in November, when gold imports dipped by more than half compared with the previous year. But silver imports remained high. From April to November 2025, silver imports jumped a whopping 136% to $7 billion, while gold imports rose 3% year-on-year to $45 billion.

Will the bull run continue in 2026? Most analysts believe it will.

What’s Ahead

The precious metals’ prices have some steam left simply because the conditions that have boosted their prices will not vanish soon, say analysts.

Philippe Gijsels, Chief Strategy Officer at BNP Paribas Fortis, says the boom in gold, silver and platinum prices will continue in the New Year. “Gold could land somewhere between $5,000 and $6,000, while silver will print a price in triple digits. Platinum, which had until the most recent run-up been badly lagging, may have the largest potential,” he says.

Billionaire investor Ray Dalio, the founder of Bridgewater Associates, too is bullish on gold. He suggests that investors allocate 5-15% of their portfolios to the metal. In a recent podcast with Nikhil Kamath, he said though gold offers low real returns of about 1.2% a year, it is ideal for diversification. “Because when the other parts of the portfolio do very badly—because of certain things like stagflation or debt issues—then gold does very well,” he said.

There are several reasons Dalio is bullish on precious metals. Chief among these are rising debt levels across the world.

Amongst other reasons, Naveen Mathur, Director of Commodities and Currencies at Anand Rathi Share and Stock Brokers, believes some Asian countries purchased a lot of gold, propping up the yellow metal in 2025. Investors and central banks, too, piled on the yellow metal.

India’s official gold reserves are currently at historic highs in terms of volume and value. The Reserve Bank of India’s (RBI’s) holdings rose to over 880 tonnes by October, the highest ever in terms of tonnage. They stood at 876 tonnes in December 2024 and 677 tonnes in end- 2020. Due to rise in prices, the value of gold reserves held by the RBI leapt past the $100-billion mark for the first time this October.

Though the US dollar dominates reserves globally, amid rising geopolitical tensions and debt, central banks have steadily increased their gold holdings as a hedge against currency debasement and sanctions risk, says Alok Agarwal, Head of Quant & Fund Manager at Alchemy Capital Management. “For the RBI, a higher share of gold reduces concentration risk in US treasuries and Euro assets, while benefiting from a structural bid under gold as other central banks also accumulate the metal.”

One of the biggest tailwinds for gold, perhaps, is the move of the BRICS (Brazil, Russia, India, China, South Africa) bloc to reduce dependence on the US dollar in trade and reserves. Last year, they piloted a new BRICS+ currency and payment system known as the UNIT. This is backed by a fixed reserve basket that consists 40% of gold (by weight) and 60% of BRICS+ currencies. It will be delivered via a digital platform using transparent blockchain technology.

“The idea with the UNIT is to combine assets such as gold with a set of diversified currencies, reducing exposure to financial volatility and targeting of single currencies by speculators, while building trust between UNIT users,” says Mathur.

The UNIT will not be controlled by any single country or central bank, nor would it function as an everyday currency. It could reduce the bloc’s collective dependence on the US dollar and lower exchange rate costs by removing the need to convert local currencies to and from the US dollar. (See Box: How the BRICS “Unit” Benefits Gold)

Silver: The New Gold

Though there’s no currency demand for silver, a host of other factors have made the wite metal rally twice as much as gold. In 2025, silver outperformed other major precious metals with a rally of 133% in the domestic markets. The price of the metal more than doubled to Rs 2 lakh per kg on December 19, 2025, from Rs 85,851 per kg on December 31, 2024. In international markets, silver prices surpassed $74 an ounce on December 24, up 150% YoY, and nearly 40% in just one month. Platinum and palladium have soared more than 115% and 90%, respectively, since January 2025.

Mathur of Anand Rathi says, “Investors have piled into alternative assets in a wider retreat from government bonds and currencies, supporting investment demand into silver. Optimism about the metal’s fundamental supply and demand balance has also been priced, as the market is set to witness a fifth consecutive year of supply deficit.”

In light of the rally, some are calling silver the new gold, says Kranthi Bathini, Equity Strategist at WealthMills Securities. Though he believes precious metals will consolidate this year, “demand for silver from the electric vehicle space may give it some support.”

For those in the business, these are heady times indeed. Vedanta Group Chairman Anil Agarwal said in a post on X that silver has emerged from gold’s shadow. “It is unique because it is the only metal which has intrinsic value and functional demand,” he added, referring to its use in new technologies. “As the only producer of silver in India, we have seen this first-hand at HZL. Prices will go up and down, but silver’s extraordinary shine is here to stay.”

Of course, not everybody involved in the precious metals space is happy with the rally.

For jewellery retailers and makers, higher prices typically soften volume growth, particularly in the mass and discretionary segments. Sunny Agrawal, Deputy Vice President-Fundamental Research (Retail Research) at SBI Securities, says, “For B2C organised players, rising gold prices will lead to weaker demand, impacting volume growth for jewellery companies. However, higher realisation helps offset the reduction in volume and sales momentum usually tends to be better, as most Indian consumers prefer to have a fixed budget for big events like engagement/wedding.”

In its recent earnings call, the country’s largest organised jewellery player by revenue, Titan Company, acknowledged that the “meteoric” rise in gold prices initially led to customer hesitation, especially during the rapid run-up. However, once prices stayed elevated and did not correct meaningfully, big-ticket and affluent buyers returned during the festive season.

On the financing side, elevated gold prices have turned favourable for gold loan companies. For instance, the consolidated PAT of Muthoot Finance, India’s largest gold loan company by loan book and branch network, soared 74.26% YoY to Rs 4,385.90 crore in the first half of FY26. The company’s consolidated loan assets under management grew 42% YoY to Rs 1.48 lakh crore during the period.

The Impact

The rally in precious metals is worrying for India, among the world’s biggest importers. The Ministry of Commerce and Industry’s trade data shows that the unit price of gold imports rose 31% from April to October 2025, which offset the dip in volumes. Unit prices of silver rose nearly 43%.

Even if the volume of imports has dipped in 2025, the sharp rise in bullion prices drives up the overall value of imports in India, as explained earlier. Remember that India is heavily dependent on imports for petroleum products that are essential for the economy. So, discretionary purchases of gold and silver eat up precious forex that could be used for other necessities.

Deveya Gaglani, Senior Research Analyst-Commodities, Axis Securities, says, “This higher import bill widens the current account deficit (CAD), increasing India’s external financing needs. As more dollars are required to settle these costlier imports, demand for the US dollar rises, putting downward pressure on the Indian rupee.”

This dynamic was evident last year, when the rally in gold prices indirectly contributed to the dollar appreciating by almost 5% against the rupee, which breached a record low of 91 per dollar in mid-December. “A weak rupee due to higher import costs makes other imported items costlier, especially oil, increasing inflation. Furthermore, the trade balance rises as the trade deficit widens,” says Gaglani.

The Outlook

It may not be all smooth sailing for precious metals.

Gijsels of BNP Paribas Fortis says the largest commodities bull market in recent history comes with a catch. There may be violent corrections from time to time. “Currently, the precious metals complex is overbought. So, a 10%-plus correction may happen any time just because momentum temporarily collapses under its own weight.”

As for the reasons for such a correction, he says markets always find a suitable excuse. “It could be a ceasefire in Ukraine, higher interest rates, much stronger economic data...,” Gijsels adds. The real rationale would be that it is time for a pause because the market has run too far, too fast. Even then, come next Christmas, the precious metals complex will be much higher than today, he says.

Brokerage giant JP Morgan, too, is upbeat on gold. It expects the yellow metal to trade at $5,055 per troy ounce by December 2026 and $5,245 per troy ounce by 2027.

Sentiment is bullish in India as well. Hareesh V, Head of Commodity Research at Geojit Investments, says, “Gold is expected to remain well bid in 2026 as long as global growth risks escalate and growth slows sharply. Key drivers include further US Fed rate cuts, a softer US dollar, and sticky inflation supporting gold’s safe-haven appeal.”

What then of India’s import conundrum? It’s not clear what the government can do. It tried to curb imports by issuing sovereign gold bonds. That scheme, which gave investors paper in the place of physical gold with the added enticement of interest, was stopped last year as government liabilities skyrocketed to more than Rs 1.2 lakh crore due to sharp rise in gold prices.

Madan Sabnavis, Chief Economist at the Bank of Baroda, offers a sober take. Demand increased mainly because of the volatility sparked by Trump’s tariffs, which weakened the US dollar and boosted gold demand. Silver’s rise, meanwhile, was a collateral effect heightened by supply shortages. “In my view prices will stabilise next year as clarity emerges on dollar tariffs and fed rates.”  

@iamrahuloberoi