New Delhi: Outsmarting all asset classes globally in 2025, gold and silver with massive returns and repeated record-breaking rallies redefined the precious metal market dynamics amid intensifying global political challenges, unstable tariff policies and persistent supply-chain disruptions.
Marking one of the strongest performances for bullion in decades, silver prices surged more than 169 per cent during the year, while gold rallied over 76 per cent, reaffirming the role of precious metals as an anchor investment class in an extremely volatile world.
In the domestic market, gold touched a lifetime high of Rs 1,42,300 per 10 grams on December 26, while silver scaled a record of Rs 2,41,000 per kg on December 30.
Globally, spot gold began the year at around USD 2,657.16 per ounce and rallied to a peak of USD 4,550.11 per ounce on December 26, registering gains of up to 71.24 per cent.
Spot silver, meanwhile, started the year at about USD 29.57 per ounce and soared to a peak of USD 83.63 per ounce on December 29, clocking robust returns of 182.82 per cent.
The rally was initially triggered by the Fed’s policy easing, but it gathered pace as President Donald Trump‘s return to the White House, with tariff rhetoric, fuels uncertainty, central banks doubled down on bullion reserves, and supply constraints across metal markets.
“Gold and silver surged over the past year on the back of a powerful mix of macro factors, such as structural demand and physical supply tightness, Naveent Damani, Head of Research, Commodities, Motilal Oswal Financial Services Ltd (MOFSL), told PTI.
US Federal Reserve’s Pivot Marks Inflection Point:
The early momentum in bullion’s remarkable rally in 2025 came from the US Federal Reserve’s (Fed) policy easing, with the central bank delivering three cautious 25-basis-point rate cuts amid signs of cooling inflation, putting pressure on the US dollar, lending support for the bullion prices.
“2025 marked a clear inflection point for the Fed, with three cautious 25-basis-point cuts delivered amid divided voting and visible political pressure.
“…with Chair Jerome Powell’s term ending in May 2026 and a potentially more dovish successor in the wings. Bullion is likely to react ahead of policy, keeping the bias constructive despite brief corrective phases,” Damani said.
Silver outshines due to the supply crunch:
Silver has emerged as an all-out performer of 2025, driven by strong industrial demand, amid constrained mine supply, and rising production costs.
Silver has been facing shortages for five years due to mine shutdowns and China-led supply constraints, with a sixth straight shortfall likely in 2026 amid rising costs and firm demand.
“Silver is entering 2026 with a fundamentally tighter setup than gold. With recent mine shutdowns and fresh supply constraints from China and elsewhere, next year is likely to mark a sixth straight deficit. This is no longer just a demand story; it is a structural supply squeeze,” Damani of MOFSL said.
Trump’s tariff rhetoric fuels uncertainty, lifts safe-haven assets:
The demand for safe-haven assets increased after Trump returned to power, a resurgence of trade uncertainties and tariff-related tremors globally.
“Supply chains remain fragile, with tariffs and trade re-shoring creating hidden inflation pockets even as growth slows,” Damani said, adding that “In this tug of war between inflation and growth, gold benefits as a balance-sheet hedge, while silver sits at the crossroads of industrial demand and physical scarcity, making both metals strategic rather than speculative assets in 2026.”
Central Banks anchor gold rally:
Throughout the year, robust purchases by the global central banks, including the Reserve Bank of India, remained a key pillar of support for bullion prices throughout the year.
After record purchases of about 1,070 tonnes in 2024, 2025 is still tracking above 700 tonnes, a slowdown but by no means a reversal.
Damani explained that central-bank buying has quietly become the backbone of gold’s bull market, attributing the trend to a structural de-dollarisation drive as reserve managers reduce exposure to US currency and diversify their reserves.
China has continued to lead gold purchases, with key participation from India, which also remained a consistent buyer of the metal.
India’s demand sees a shift towards investment:
In the domestic markets, elevated prices of bullion reshaped demand patterns. Jewellery volumes contracted, but investment demand for gold bars and coins increased as households sought safety amid uncertainty.
Kinjal Shah, Senior Vice President & Co-Group Head, ICRA Ltd, told PTI, “Investment in gold bars and coins accounted for around 31 per cent of India’s volumetric gold consumption in FY2025, up from around 22 per cent in FY2023”.
Despite lower volumes, India continues to hold its position as the leading gold jewellery consumer globally, supported by a strong cultural affinity.
On the market forecast, Shah said that overall gold consumption is expected to drop by 12-13 per cent in FY2026, owing to a higher 21-23 per cent volume contraction in jewellery consumption, while bars and coins demand is on the rise.
Correction seen as a healthy pause:
After an exceptional run, analysts said bouts of consolidation will happen but remain constructive on the medium-term outlook.
“After a year where silver and gold have rallied, some consolidation is warranted. Interest-rate decisions, growth data and the ripple effects of tariffs could trigger short-term volatility across quarters,” Navneet Damani of MOFSL said.
Meanwhile, JP Morgan Global Research forecasts that gold prices in the overseas markets will rise to USD 5,055 per ounce by the final quarter of 2026.
With central-bank purchases, ETF inflows, episodes of geopolitical risks and supply-chain disruption in place, gold and silver head into 2026 with their strategic appeal firmly supported, closing a landmark year for bullion.
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