NEW DELHI, India — Gold’s strong rally in 2025 — with prices surging nearly 60 percent year-to-date — is expected to carry into 2026, supported by safe-haven demand and continued central bank buying, according to a report released Thursday by Axis Mutual Fund. However, the outlook also warns of volatility and potential corrections as global financial conditions evolve.
The report said gold maintains a positive near-term bias but cautioned that higher real yields, a stronger U.S. dollar, firmer global growth, softer inflation, and a hawkish policy stance in the U.S. could weaken overall demand next year.
Gold-backed ETFs have seen robust inflows, with global assets under management reaching a record of about $470 billion by the end of Q3 2025. Demand for bars and coins has also been strong, exceeding 300 tonnes for three consecutive quarters.
“In the near term, we have a positive bias on gold, supported by safe-haven flows given the backdrop of global uncertainty,” the report said. The 2025 rally has been fueled by lower opportunity costs of holding non-yielding gold and expectations of further U.S. rate cuts. Axis Mutual Fund anticipates one to two additional cuts in the current cycle as economic conditions remain uneven and labor-market weakness persists.
Concerns over Federal Reserve independence, a weaker U.S. dollar, and ongoing global geopolitical and macroeconomic risks are also driving investors toward gold. Central banks worldwide have expanded their gold reserves, with gold’s share surpassing that of U.S. Treasuries for the first time in nearly 30 years.
Silver, meanwhile, is expected to remain in an uptrend in 2026, though analysts warned that stretched valuations could trigger exchange-traded fund outflows or face downward pressure if copper prices decline. Silver is currently trading at about $58 per troy ounce.
“Overall, our outlook for silver is constructive with multiple tailwinds sustaining its rally even as valuations stretch,” the report noted. However, unlike gold, central banks show limited appetite for silver, and potential substitution in industrial applications may also temper demand.
The report added that silver supply remains largely inelastic because most mined silver comes as a by-product of lead, zinc and copper extraction, limiting capacity to respond quickly to rising prices. (Source: IANS)
