Gold, Silver At Record High: MOSFL Predicts White Metal's Surge To Rs 3.2 Lakh/Kg Mark By 2026 End

Gold and silver surged to fresh life-time highs on the Multi-Commodity Exchange (MCX) on January 12. The gains seen in the precious metals followed recent geopolitical upheavals in Iran and Venezuela coupled with an overall macroeconomic shift in demand for the two metals.

On January 12, the precious metals hit their lifetime high in rupee terms with silver (999 purity) surging to Rs 2,57,283 per kilogram and gold (999 purity) prices climbing to the Rs 1,40,005 per 10 gram mark.

Silver futures with March 5, 2026 expiry surged 5 per cent to trade at an all-time high of Rs 2,65,391 per kilogram on the MCX. On the other hand Gold Futures with February 5, 2026 expiry gained 2 per cent to trade at an all-time high of Rs 1,41,469 per 10 grams.

What Is Driving Gold and Silver Prices Up?

Gold and silver have given stellar gains in 2025. Gold Futures rallied 76 per cent on the MCX in 2025 while Silver Futures rallied 170 per cent. In 2026, the two metals have responded to several geopolitical developments, macroeconomic changes and shifts in market sentiment. Here’s a look at some of the factors driving the prices of gold and silver:

Safe Haven Demand

The safe haven demand for gold and silver has pushed the prices of the two metals higher. Amid mounting uncertainty, investors have historically invested in gold and silver as they tend to hold value when currencies or stocks fluctuate. In the first few days of the new calendar year, two major geopolitical events have turned investor sentiment cautious, prompting safe-haven buying. On January 10-11, the US struck Syria as a direct response to an ISIS ambush in December 2025.

Additionally US President Donald Trump’s warning to Iran amid significant civil unrest also added to investor concerns. Prior to the tensions between US and Iran, the US military’s capture of Venezuelan President, Nicolas Maduro also spooked investors. The safe haven demand is also likely to have been influenced by Trump’s 500 per cent tariff threats to countries importing Russian oil.

U.S. Dollar and Interest Rates

The U.S. Dollar Index has witnessed a dip recently on account of political friction between the U.S. administration and the Federal Reserve. The index traded around 98.495 down by 0.395 points or 0.40 per cent at the time of writing. On January 11, US Federal Reserve Chair Jerome Powell revealed that the Trump administration threatened him with criminal indictment over his Congressional testimony. Powell added that the action was a "pretext" to make the Fed cut interest rates. A weakening dollar increases the lucrativeness of gold (which is priced in dollars) as it becomes relatively cheaper and more attractive for international buyers.

Depreciating Rupee

The Indian Rupee traded around Rs 90.23 against the US Dollar. India imports most of its gold and silver thus a relatively weaker rupee makes imports significantly expensive, directly pushing up local prices. Additionally high domestic demand for jewelry during the Indian wedding season provides a solid floor for prices, even when global markets are volatile.

Structural Demand For Silver

Prathamesh Mallya, DVP Research - Non Agri Commodities and Currencies at Angel One told Outlook Money that the surge in silver prices is also driven by its industrial utility. The precious metal is used across the electronics industry. However the rising adoption of artificial intelligence, electric vehicles have heightened the demand for the precious metal

“Silver’s rally has extended into 2026 also; however, prices remain volatile. Besides safe haven, the utility of this metal in industrial activity, and digital modes of investment drive the price of the commodity. Safe haven demand is just one side of the coin. There are other factors at play,” Mallya said.

MOSFL’s Outlook For Silver and Gold

Wealth management firm Motilal Oswal (MOSFL) believes that the rally in gold and silver is not over, despite the surge. According to MOSFL’s Preview for 2026, MCX Gold Futures are expected to surge to Rs 1,60,000 per 10 grams and MCX Silver Futures are expected to climb to Rs 3,20,000 per 1 kilogram by the end of 2026. The wealth management firm added its outlook for 2026 remains positive, with the broader trend still upward and added that near-term corrections are likely to be healthy. MOSFL added that the rise in gold prices is likely to be supported by policy and currency uncertainty in the first half of the year.

“Gold and silver strength is likely to be front-loaded into the first half of 2026 amid policy and currency uncertainty, but whether the second half brings consolidation or continuation will depend on growth headlines, bond market stability and monetary credibility,” MOSFL said.

The wealth management firm also mentioned that the strong structural demand for the precious metal is expected to limit the downside.

“However, despite potential near-term corrections, strong structural demand overall uncertainties limit downside, reinforcing gold and silver as core portfolio hedges in a fragmented global macro landscape,” MOSFL said.

What Should Investors Do Amid The Rally

Mallya urged investors looking to invest in gold and silver should avoid trying to time the market. He advised investors to increase their exposure to these assets via a steady accumulation.

“One should not time any of these markets(gold and silver) as it would be difficult to enter/exit. One should do a steady accumulation of these assets via SIP, digital, physical, depending on the need and the desire of the investor,” Mallya said.

Mallya added that buyers can use major dips to increase their exposure to silver as the long-term outlook for the precious metal remains positive despite high volatility,

“The near-term outlook for Silver will be positive, even though it remains highly volatile on a day-to-day basis. Any corrections can be used as buying opportunities for those who missed the rally,” Mallya said.