2026 Commodity Market Outlook: What to Expect for Gold and Silver
2025: A Landmark Year for Commodities
The year 2025 proved to be significant for the commodity market, with gold and silver significantly outperforming equities and bonds. According to the report titled “Commodities Review 2025 & Preview 2026” by Motilal Oswal Financial Services, silver surged by an impressive 170% in the domestic market, while gold saw a remarkable increase of 76%. This performance was driven by structural factors such as central bank purchases, supply shortages, currency volatility, and industrial demand.
What Lies Ahead in 2026?
The pressing question now is: What will happen in 2026? The latest report from Motilal Oswal, released in January 2026, indicates that while there will be structural support for precious metals, a one-sided rally like that of 2025 is unlikely. The year 2026 is expected to be characterized by consolidation, with potential short-term volatility (especially in Q1) and sharp sell-offs, although the long-term trend remains positive.
Key Insights from Motilal Oswal's Report
Key Points from the Report:
- Gold: Continuous purchases by central banks will maintain its strength as a safe-haven asset in portfolios. Internationally, levels could reach between $4,750 and $5,000 per ounce. A steady rise is anticipated domestically, though not excessively volatile.
- Silver: Silver may outperform gold due to its dual role as both a precious and industrial metal. Demand will remain robust due to energy transitions, electrification, and infrastructure needs, while supply deficits persist. Targets on the MCX are set between ₹3.20 lakh and ₹3.30 lakh per kilogram (some reports mention $90-$95 per ounce).
- Risk: Significant volatility and profit booking in the first quarter of 2026 could lead to sharp corrections. The report notes that “this year will be bumpy, with sharp sell-offs and pullbacks.”
Comparative Outlook: 2025 vs 2026
Comparison of 2025 vs 2026 Outlook (Based on Motilal Oswal):
| Parameter | 2025 Performance | 2026 Outlook (Forecast) |
|---|---|---|
| Gold | +76% (Domestic) | Structural Support, $4,750-$5,000 |
| Silver | +170% (Domestic) | Outperform, ₹3.20-3.30 lakh |
| Main Drivers | Policy Uncertainty, Tight Supply | Consolidation, Industrial Demand, Volatility |
| Risk | Low (One-Way Rally) | High (Sharp Sell-offs in Q1) |
Investment Advice
Navneet Damani, Head of Research for Commodities, stated that precious metals are transitioning from being “performance-driven” to “structurally supported” assets, which will serve as long-term portfolio stabilizers.
Investment Advice: For those already holding investments, it is advisable to stay invested. New investors should consider SIP-style purchases, particularly in silver, while keeping allocations limited due to higher risks. Global macro uncertainties (policy shifts, geopolitical tensions) will continue to support these metals.