Gold’s remarkable rally from $2640 (~Rs 76800) in January 2025 to $4332 (Rs 135,450) in December 2025 — a historic 75% surge — has been driven by a powerful convergence of macroeconomic, geopolitical, and structural market forces.

Top 5 themes for the Gold bull run in 2025

The gold bull run of 2025 has been driven by a powerful convergence of macroeconomic, political, and structural factors, pushing prices to record highs and reinforcing gold’s role as a strategic asset. The following five themes explain the strength and sustainability of this rally.

1. Loose Monetary Policy by the US, ECB and BOE

One of the most significant drivers has been the shift toward accommodative monetary policy by major central banks. As growth slowed and inflation showed signs of moderating, the US Federal Reserve, the European Central Bank, and the Bank of England signalled and implemented rate cuts, injecting liquidity into the financial system. Falling real interest rates reduced the opportunity cost of holding non-yielding assets like gold, while abundant liquidity boosted demand for hard assets as stores of value. Historically, such environments have been highly supportive of gold prices.

2. Uncertainty Due to Trump Tariffs

The resurgence of tariff-related rhetoric and policy actions under a Trump-led trade agenda reignited fears of trade wars and supply-chain disruptions. Tariffs raised concerns around higher inflation, slower global trade, and increased volatility in financial markets. This policy uncertainty prompted investors to seek protection against policy shocks, benefiting gold as a safe-haven asset. The unpredictability of tariff decisions added a persistent risk premium to gold prices throughout the year.

3. US High Debt Levels and a Prolonged Government Shutdown

The US fiscal situation became a major concern in 2025. Soaring debt levels, widening deficits, and a 40-day government shutdown undermined confidence in fiscal governance. The shutdown disrupted economic data, dampened growth sentiment, and highlighted political dysfunction. These developments intensified worries about long-term debt sustainability and currency debasement, increasing gold’s appeal as a hedge against fiscal instability and sovereign risk.

4. Strong Demand from ETFs and Central Banks

Investment flows into gold-backed ETFs surged as both institutional and retail investors increased exposure. Simultaneously, central banks—particularly from emerging markets—continued to accumulate gold at a robust pace, further reducing reliance on US Treasuries. This sustained official-sector buying provided a strong structural floor to prices, making the rally more durable than purely speculative cycles.

In 2025, retail investors allocated approximately 750 tonnes of gold through exchange-traded funds (ETFs), marking a 24% increase year-on-year. This surge in inflows pushed global gold ETF assets under management (AUM) to a record high of around 3,970 tonnes.

In India, investor participation strengthened significantly, with gold ETF inflows rising by nearly 50% during the year. As a result, total gold ETF holdings in India crossed 86 tonnes, underscoring the growing role of ETFs as a preferred investment avenue for gold exposure.

5. Gold Awakening: Increasing Allocation in Portfolios

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, but it’s the beginning of a paradigm shift!!!

Top 5 reasons for historical Silver’s bull run in 2025

Silver’s extraordinary rally from $29.30 (~₹87,300/kg) in January 2025 to $71 (~₹2,35,920/kg) in December 2025—a surge of over 170%—marks one of the strongest bull runs in the metal’s modern history.

This move was not driven by speculation alone but by a powerful convergence of structural, macroeconomic, and policy-related forces. Five key factors explain the magnitude and durability of silver’s bull run.

1.         Structural supply deficit and low inventories

Silver has been in a persistent multi-year supply deficit, where global demand consistently exceeds mine production and recycling. Inventories at exchanges and refiners declined sharply, leaving little buffer against demand shocks. Unlike gold, the silver supply cannot respond quickly to higher prices, making the market extremely sensitive to shortages and amplifying price moves.

2.         Explosive industrial demand, led by clean energy

Silver’s unmatched electrical conductivity makes it indispensable for solar panels, EVs, power grids, electronics, and defence applications. The global push toward energy transition and electrification sharply lifted industrial consumption. Solar alone absorbed a growing share of annual supply, structurally tightening availability for investment and jewellery uses.

3.         Monetary easing and liquidity tailwinds

The Federal Reserve and other global central banks shifted toward monetary easing, cutting interest rates and injecting liquidity into the financial system. Falling real yields reduced the opportunity cost of holding non-yielding assets like silver. Easy liquidity also encouraged speculative participation, pushing prices higher once key resistance levels were breached.

4.         Policy and geopolitical catalysts

Silver’s recognition as a critical mineral in the US, coupled with China’s tightening grip on strategic mineral exports, re-rated silver as a geopolitical asset. Ongoing global conflicts, trade tensions, and supply-chain nationalism added a strategic premium, prompting governments and industries to secure long-term access to silver.

5.         Investment flows and the gold outperformance cycle.

After gold’s initial rally, investors rotated into silver, historically known to outperform gold in the later stages of precious-metal bull markets. Strong ETF inflows, futures positioning, and retail participation accelerated the rally. The sharp compression in the gold–silver ratio reinforced silver’s catch-up trade.

Together, these forces transformed silver from a cyclical commodity into a strategic, structurally tight asset, underpinning its historic rally in 2025.

Factors that we need to keep an eye on in 2026

As we step into 2026, gold and silver prices will be shaped by a mix of monetary, political, fiscal, and structural investment forces, keeping volatility elevated but the broader bias supportive.

1.         Fed Leadership Transition and Monetary Policy

A major factor will be Jerome Powell stepping down in May 2026 and the appointment of a new Fed Chair. Markets are already pricing in a more accommodative stance, with expectations shifting from two rate cuts to potentially deeper or faster easing. Any perception of a dovish Fed will lower real interest rates and weaken the dollar, both of which are traditionally strong tailwinds for precious metals.

2.         Tariffs and Policy Uncertainty

The court decision on Trump-era tariffs in early January will be closely watched. A continuation or escalation of tariffs could reignite trade tensions, raise inflation risks, and dampen US growth prospects. This combination of slower growth and policy uncertainty typically boosts demand for safe-haven assets like gold, while also supporting silver through inflation-linked flows.

3.         US Debt and Fiscal Sustainability

The ballooning US fiscal deficit and debt levels remain the biggest macro overhang. With debt servicing costs rising and political consensus on fiscal discipline weak, concerns around long-term debt sustainability and currency debasement are likely to persist. This structural risk underpins gold’s role as a hedge against sovereign and monetary instability.

4.         Sustained ETF and Central Bank Buying

Finally, strong ETF inflows and continued central bank purchases reflect a broader “Gold Awakening,” where gold is increasingly viewed as a core portfolio allocation rather than a tactical hedge. This steady, price-insensitive demand provides a durable floor for prices as we move through 2026.

Price Outlook for 2026

The above forces together suggest precious metals will remain well supported, with gold anchoring portfolios and silver benefiting from higher-beta exposure. After a sharp rally, both metals may see intermittent consolidation, but the broader trend remains constructive. Over the next year, gold could target $5,000–5,500 (~Rs 150,000 – 165,000), supported by rate cuts, central-bank buying, and fiscal concerns. Silver could touch the targets of $95–100 (~Rs 300,000 – 325,000), aided by industrial demand and tight supply. Both Gold and Silver are in structural bull markets, so we can witness healthy short-term corrections of 10-15% as profit booking and price retracement, but dips are likely to attract buying as investors increasingly view precious metals as strategic portfolio assets rather than short-term trades.