The precious metals market enters 2026 with unprecedented strength, underpinned not only by the remarkable price gains of 2025 but also by fundamental structural shifts in demand and ownership. Gold and silver experienced historically rare rallies last year, signalling a new phase for the metals beyond cyclical movements.
Gold rose roughly 70% in 2025, climbing from around US$2700 per ounce at the start of the year to over US$4500 by December. Silver outpaced gold with a 128% gain, briefly surpassing US$80 per ounce before consolidating. Momentum carried into 2026, with silver adding an additional 13% in the first week alone, highlighting the intensity of late-cycle investor activity.
Analysts suggest that the key question for investors is no longer whether last year’s rally was justified, but whether the metals have reached a peak or established a new trading equilibrium. Evidence points toward the latter. Structural drivers, including persistent central bank demand, shifts in investor behaviour, and a changing macroeconomic backdrop, are likely to sustain higher levels for both metals.
For 2026, gold is expected to trade between US$ 4700 and US$ 4900 per ounce, with a year-end target of roughly US$ 4800. While upside from current levels may be modest at 5 to 8%, analysts emphasise that gold has effectively entered a new long-term trading corridor. Unlike previous cycles, the rally was not solely driven by short-term economic or monetary conditions.
Central bank demand has emerged as a defining structural factor. In the final quarter of 2025, central banks purchased approximately 137 tonnes of gold, a volume nearly equal to the combined purchases of the first eight months of the year. Such acquisitions are strategic and largely insensitive to short-term price fluctuations, reducing effective market supply and supporting long-term stability.
Gold’s behaviour in 2025 also diverged from traditional models. Historically, rising real yields have weighed on gold prices. Last year, however, gold gained more than 60% even as real yields remained positive and elevated. This signals a shift in the profile of marginal buyers, emphasising long-term holding over tactical hedging.
With monetary policy expected to ease and U.S. federal debt continuing to outpace growth, gold increasingly functions as a store of value and monetary alternative. Analysts suggest that structural support now lies between US$ 3500 and US$ 4000 per ounce, reducing the likelihood of deep cyclical drawdowns.
Silver faces a more volatile trajectory, with an expected 2026 range of US$ 65 to US$ 70 per ounce, though temporary spikes toward USD 80 to 90 are possible during periods of tight supply or investor inflows. Unlike gold, silver confronts a persistent physical deficit, with industrial demand, particularly in photovoltaics, electrification, and energy transition applications, exceeding total mine supply for multiple years.
The gold-to-silver ratio, which fell from above 100 to below 60 in 2025, reflects these structural differences. Silver’s higher beta makes it more sensitive to both macro sentiment and physical constraints, offering higher upside potential but also greater volatility and drawdown risk.
For investors, gold is recommended as a core portfolio allocation due to its evolving role as a reserve-like asset with strong structural support. Silver remains attractive for selective exposure, particularly for those willing to actively manage risk and volatility. –Simonis Storm
Caption
Precious metals market enters 2026 with unprecedented strength.
- Photo: Contributed
