2026 bullion outlook: Gold to stay defensive anchor, silver offers higher-beta play amid policy easing

Metals markets delivered standout, near-generational returns in 2025 despite global turbulence, setting the stage for a constructive outlook into 2026. Silver emerged as the top performer, posting gains of over 127%, while gold extended its multi-year bull run with a solid 65% rise. According to PL Capital’s Market Outlook report, global gold demand touched a record 1,313 tonnes in the July–September quarter, underlining the strength of investor and institutional appetite.

A key driver of gold’s rally has been the surge in investment flows. Exchange-traded fund (ETF) inflows rebounded sharply, while central banks continued to accumulate gold at an aggressive pace. “India has recorded its highest gold ETF inflows on record this year. The 2026 outlook for gold stays moderately to strongly positive,” the PL Capital report noted, pointing to sustained momentum even after sharp price gains.

According to Yash Sedani, Assistant Vice President, Investment Strategy at 1 Finance, gold has firmly re-established itself as a strategic reserve asset for central banks through 2025, a trend likely to persist into 2026. “A growing number of countries have continued to diversify their foreign exchange reserves away from the US dollar and towards gold, driven by concerns around currency concentration risk, sanctions exposure, and long-term monetary stability,” he said. As a result, central bank buying has become a structural source of demand rather than a cyclical one.

Sedani added that persistent geopolitical conflicts across regions have reinforced gold’s role as a safe-haven asset during periods of uncertainty. Expectations of further easing in global interest rates have also supported prices by lowering the opportunity cost of holding non-yielding assets. “For 2026, gold is likely to remain a core defensive and reserve asset,” he said, while noting that silver offers a higher-beta exposure that blends precious metal dynamics with industrial growth themes.

Silver’s performance in 2025 underscored that distinction. Prices surged past $60 per ounce, rising more than 100% and significantly outperforming gold. PL Capital attributes this rally to a powerful industrial demand cycle driven by solar photovoltaic installations, electric vehicle batteries, semiconductors, and power electronics. “Supply remains in structural deficit, reinforcing the strong outlook for 2026,” the report said.

India’s macro backdrop further adds to the supportive case for metals. The economy heads into 2026 with moderating inflation, improved earnings visibility, and a more accommodative monetary stance. The Reserve Bank of India’s recent 25 basis-point cut in the repo rate to 5.25%, alongside lower inflation projections and upgraded GDP forecasts, signals a favourable interest-rate environment that could persist.

Looking ahead, Sedani expects gold’s broader momentum to remain intact despite the possibility of short-term volatility. “With geopolitical risks elevated and global monetary policy likely to stay accommodative relative to historical levels, the fundamental drivers for gold remain intact,” he said.

Silver, meanwhile, stands out for its dual character. “While its valuation remains closely linked to gold, silver benefits from additional demand arising from industrial applications such as electronics, solar energy, and emerging clean-energy technologies,” Sedani noted. On the supply side, silver production remains constrained by geological, regulatory, and environmental factors, making supply less responsive in the near term.

Together, these forces suggest that in 2026, gold will continue to anchor portfolios defensively, while silver offers investors leveraged exposure to both macro uncertainty and industrial growth.