Key Macro & Structural Drivers

1. Central Bank & Institutional Support

  • Central banks remain aggressive buyers of gold, with annual purchases exceeding 1,000 tonnes since 2022.
  • In 2025 alone, purchases were estimated at ~900 tonnes, reinforcing a structural price floor for gold.
  • For the first time since 1996, global central banks’ gold reserves now exceed U.S. Treasury holdings, reflecting diversification away from USD assets and geopolitical risk management

2. Monetary & Currency Tailwinds

  • Falling bond yields, a softer US dollar, and expectations of Fed rate cuts have reduced the opportunity cost of holding non-yielding assets like gold.
  • Renewed ETF inflows indicate re-entry of both institutional and retail investors, strengthening demand durability .

3. Geopolitical & Economic Uncertainty

  • Escalating global tensions, trade conflicts, and fiscal uncertainty continue to reinforce the safe-haven role of precious metals.
  • Precious metals are positioned as hedges against inflation, sanctions risk, and currency debasement

Gold Outlook (2026)

  • Trend: Bullish (US & MCX)
  • U.S. Gold Targets: $5,108 – $5,380
  • MCX Gold Targets: ₹157,561 – ₹162,500
  • Strategy: “Buy on dips / accumulate longs”
  • Persistent central-bank demand, ETF flows, and favorable technical structure keep gold in a long-term uptrend

Silver Outlook (2026): Stronger Than Gold

Structural Supply Deficit

  • 2025 marks the 5th consecutive year of global silver supply deficit.
  • Cumulative deficit (2021–2025E): ~800 million ounces, nearly equal to one full year of mine supply.
  • Industrial and investment demand continue to exceed mining + recycling supply.
  • Inventories are declining sharply across London vaults and China

Gold–Silver Ratio Signal

  • Ratio compressed from ~90:1 (early 2025) to ~57:1, moving toward the long-term average of 50:1.
  • At 50:1, silver implies ~$90; at 40:1, >$110, indicating further upside potential

Targets

  • U.S. Silver Targets: $97 / $103 / $115
  • MCX Silver Targets: ₹3,22,980 / ₹3,46,695 / ₹3,61,365
  • Trend: Bullish; silver expected to outperform gold

ETF Recommendations & Allocation Guidance

Preferred ETFs (1-year horizon)

  • Gold ETFs:

            o    SBI Gold ETF

            o    HDFC Gold ETF

Silver ETFs:

            o    ICICI Prudential Silver ETF

           o    HDFC Silver ETF

(All exhibit higher highs, strong momentum indicators, and healthy volumes.)

Portfolio Guidance

  • Recommended allocation: Up to 10% of portfolio in precious metals (gold + silver).
  • Exposure can be increased gradually based on individual risk appetite.
  • Key risk: Potential reduction in import duties on gold/silver could pressure domestic prices in the short term