- Gold and silver rose nearly 24% and 58% in Indian rupees in January 2026 on MCX spot prices
- Gold and silver gained 75% and 167% returns in 2025, with five-year rises of 237% and 446%
- Key factors supporting metals include low interest rates, US-Iran tensions, inflation, and a weak dollar
In the first month of the calendar year 2026, gold and silver, in Indian rupee terms, based on MCX spot prices, have risen nearly 24% and 58%, respectively, as of January 28, 2026. The increase has been sharp.
In 2025, gold and silver posted absolute returns of 75% and 167%, respectively.
Over the past five years—marked by the pandemic, the Russia-Ukraine war, conflict in the Middle East, Trump 2.0 protectionist policies, increased interventionism, trade wars, ongoing geopolitical tensions, and their impact on the macroeconomy—gold and silver have risen more than 237% and 446%, respectively.
Gold and silver are trading at all-time highs of more than Rs 1.8 lakh per 10 grams and over Rs 4 lakh per kilogram.
- At present, the following factors support precious metals:
- Lower interest rates and expectations of further rate cuts by the Federal Reserve
- US-Iran tensions and the possibility of military action in Iran
- Trade wars
- Risk of geoeconomic fragmentation
- Inflation risk
- De-dollarisation of foreign exchange reserves in recent years, led by China, India, and Turkey
- A weak US dollar
- The possibility of another partial US shutdown in February, weeks after the 43-day shutdown that ended in November 2025, and its potential impact on paychecks, services, and discretionary spending
- Growing fears of a US recession
- Global debt rising to about US $111 trillion in 2025, or around 94.7% of global GDP, from 92.4% in 2024
- Risk to global economic growth
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Central bank purchases of gold and silver as part of reserve management have also supported prices.
In January 2026, for the first time in 30 years, the value of gold holdings of global central banks exceeded their US Treasury reserve assets by about US $100 billion.
Central banks are also adding silver to their reserves. The Bank of Russia, the Saudi Central Bank, and the Reserve Bank of India are buying silver amid de-dollarisation.
Silver today serves both as a precious metal and an industrial metal.
It is used in automobiles, particularly electric vehicles, solar energy for panels, batteries, satellites, semiconductors, 5G technology, medicines—silver has antimicrobial properties—medical instruments, and chemicals.
The main driver of silver prices has been demand exceeding supply. This trend has continued since 2019.
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Silver Dynamics: Supply and Demand
Source: The Silver Institute
Supply remains constrained because silver is largely a byproduct of mining metals such as copper, zinc, and lead. This is why silver is often described as “half copper, half gold.”
Supply currently fails to meet industrial demand, consumer demand, and demand from silver exchange-traded funds. Imports do not resolve the issue as overall supply remains limited.
In 2026, the silver supply deficit is expected to persist, keeping prices elevated.
Which Is a Better Buy — Gold or Silver?
Both metals have distinct characteristics.
Gold is countercyclical, while silver is procyclical due to its industrial use.
During periods of geopolitical and macroeconomic uncertainty, gold has often acted as a safe haven, a store of value, a hedge, and a portfolio diversifier. In periods when equities disappointed investors, including 2016, 2018, 2022, and 2024, gold performed better.
Silver, as a procyclical commodity, has remained closely linked to industrial growth and economic expansion. With wider use in emerging industries and limited supply, silver has performed well. Compared with gold, silver shows higher price volatility.
In the current commodities supercycle, both metals have risen in value.
Gold-Silver Ratio Below 50
Source: www.goldprice.org
The current gold-silver ratio—calculated by dividing the price of gold by the price of silver to indicate relative value—stands near 47, its lowest level since 2021. This suggests silver has become relatively more expensive than gold after a rapid rise. Fewer ounces of silver are now required to buy gold.
Against a backdrop of geopolitical tensions and macroeconomic uncertainty, gold retains an advantage.
According to the World Gold Council, the combination of lower interest rates, a weaker dollar, and higher risk aversion continues to support gold.
The Strategy to Consider
Near all-time highs, making small systematic investments may be preferable to lump-sum investments.
Systematic investment plans in gold savings funds may help manage volatility through rupee-cost averaging while seeking long-term compounding.
For investors seeking exposure to both metals, gold and silver exchange-traded fund fund-of-funds structures provide combined access. These funds are passively managed and allocate 95%–100% of assets to underlying gold and silver ETFs, typically split 35%–65% in each.
Investors with existing exposure to gold or silver should ensure allocations do not exceed 10%–15% of the total portfolio, whether through physical holdings, ETFs, or fund-of-funds. Such allocations require a higher risk tolerance and a longer investment horizon of five to 10 years or more.
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Invest sensibly.
Happy investing.
Disclaimer: The views expressed in this article are solely those of the author and do not necessarily reflect the opinion of NDTV Profit or its affiliates. Readers are advised to conduct their own research or consult a qualified professional before making any investment or business decisions. NDTV Profit does not guarantee the accuracy, completeness, or reliability of the information presented in this article.
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