Gold futures contract reached a new high of $4440 for the 52nd time this year, rising 66%. Silver’s futures contract has increased 131% this year, reaching $69.5, breaking 15 records in the process. Both metals are on track to make their largest advances since 1979, when they also set a record number of highs.

This rise is being fueled by prolonged geopolitical tensions (Venezuela Blockade and Caribbean Naval Tension), aggressive central-bank buying, supply interruptions in Silver, and a global investing community more concerned about economic and political unpredictability.

Fundamental shift in investment demand

If there is one major learning from 2025 that should be applied to 2026, it is that, while uncertainty can take many forms, chronic worry surrounding tariffs, geopolitics, conflict, politics, government shutdowns, legislation, and so on has left investors feeling underexposed to gold. When combined with gold’s good price performance and lower correlations, we believe it is now more widely acknowledged as a strategic component of portfolios.

Historically, Wall Street recommended a 60/40 strategy, with 60% equities and 40% fixed-income investments (mainly bonds). Given the changing market circumstances, most fund managers and analysts recommend that investors explore a 60/20/20 strategy, which involves swapping half of their bond portfolio for gold to act as a “more resilient” inflation hedge.

The 60-20-20 allocation scheme has gained popularity and attention in the financial media. If the theory achieves popular acceptance, gold may reach new highs. With most portfolios’ average gold allocation under 5%, investors would need to buy a lot more yellow metal to increase their gold holdings to 20%! This reflects gold’s increased standing as a basic portfolio diversifier rather than a crisis hedge of last resort.

Therefore, it seems gold and silver are not in a bubble!!!

Silver Supply Deficits

Mining disruptions and limited current silver inventories are causing severe supply shortfalls, driving prices higher. Potential interest rate reduction in the United States and a lower dollar are expected to continue to boost speculator demand for silver, not to mention any geopolitical tensions that would generate keener safe-haven demand for silver.

Technically, silver stays positive on both the long and short-term charts. However, silver is in the midst of a mature bull market run, and it is quite likely that the market will need to pause in the next months. Raw commodities, especially metals, are highly cyclical and have distinct phases of boom and crisis. There is no doubt that silver is now in a boom cycle. That suggests the following phase will be a bust cycle. The only uncertainty is the start date of the bust. The scale of the silver bubble, as seen by the monthly continuation chart for nearby silver futures, suggests that the magnitude of the crash will be substantial as well.

Economic Data in focus

Last week, New York Fed President John Williams noted that recent data hint to more disinflation, while noting that the spike in the unemployment rate may reflect temporary distortions, possibly by roughly one-tenth of a percentage point, and so was not a shocking event. He stated that he does not see any hurry to change monetary policy at this time.

Switching to economic data this week, the US agenda is far and by the busiest. Next week’s first focus will be the advanced GDP reading for Q3. The data, due on Tuesday, is expected to indicate that the US economy grew at a healthy annualised pace of 3.2% in the third quarter, somewhat slower than the 3.8% reported in the second quarter. The latest consumer confidence index and durable goods orders for October are both released on the same day. The week is coming to an end, and we are set to embrace the Christmas season. A large number of traders are expected to be offline, causing the markets to slow down; yet, thin trading circumstances may apply, allowing for unforeseen market situations to occur.

If Gold continues its bullish momentum, it can touch next target of $4500 (~ Rs 138,000) with strong support at $4330 (~Rs 133,000).

If Silver continues its bullish momentum, next target is $70(~Rs 216,000) and $72 (Rs 222,000). Strong support lies at 64.50 (~Rs 200,000).

Dr.Renisha Chainani, Head- Research, Augmont