A range of factors emerging from America—which involve US President Donald Trump’s proposed actions relating to the massive debt the economy faces and future tariff action—are influencing countries to move away from the dollar (de-dollarisation) and make investments in safe asset classes such as gold.
This factor, along with sustained buying of the yellow metal by central banks in recent years (see chart) and subdued interest rates in some economies, has meant that international gold prices have risen. Globally, gold prices rose nearly 65 percent last calendar year, ending 2025 at around $4,333 per troy ounce. Ongoing geopolitical tensions across the Middle East, Venezuela and uncertainties over fresh sanctions elsewhere have seen international gold prices rise a further 10 percent to record levels in the new year.
The other precious metal, silver, has been more volatile and has risen even more sharply in the past 12 to 15 months. Globally, silver prices surged over 150 percent in calendar year 2025, ending the year at around $75 per troy ounce. In 2026, silver prices have risen a further 30 percent. For the past five years, silver has been in a chronic supply deficit, but it has remained an irreplaceable industrial metal. Now, Kotak Securities, in a January report, says: “The silver market is entering a volatile, asymmetric and potentially historic phase.”
However, even while returns on silver are higher, it is far more volatile and dependent on supply from Mexico (a 22 percent market share), Peru (about 16 percent) and China (around 12 percent). China is also the world’s largest silver consumer, utilising around 65 percent of global production.
Haria stands out as being among the earliest to have advised investors to reallocate their portfolios towards precious metals—hiking it up to 15 percent from a traditional 5 to 10 percent. “I am now suggesting that this be brought down to 10 percent, with 7 percent in gold and 3 percent in silver,” he adds. “The returns for gold and silver will get moderated in 2026.”
However, Haria maintains that he is not losing his faith in gold and its intrinsic strength as a store of value. “Putting a number to gold is foolhardy because gold has strong central bank backing and is the biggest store of value.” He maintains that most central banks across the world will continue to purchase gold in 2026.
Natasha Kaneva, head of global commodities strategy at JP Morgan, says in the global financial institution’s international research report on gold, published in December 2025, “While this rally in gold has not, and will not, be linear, we believe the trends driving this rebasing higher in gold prices are not exhausted.” She adds: “The long-term trend of official reserve and investor diversification into gold has further to run. We expect gold demand to push prices toward $5,000/ounce by year-end 2026.”
As of January 28, spot gold prices had already crossed $5,300 level, before scaling back a bit on profit taking it to $5,278 levels. Overall, JP Morgan Global Research forecasts prices to average $5,055/ounce by the final quarter of 2026, rising towards $5,400/ounce by the end of 2027.
The JP Morgan research team is bullish on further central bank buying. “We continue to lean on the relationship between tonnes of quarterly investor and central bank demand and prices to derive our gold price forecast,” Gregory Shearer, head of base and precious metals strategy at JP Morgan, says in the report.
The report forecasts around 585 tonnes of quarterly investor and central bank demand on average, comprising around 190 tonnes a quarter from central banks, 330 tonnes a quarter in bar and coin demand, and 275 tonnes of annual demand from ETFs and futures, mainly front-loaded over the next year.
Assets under management (AUM) of gold ETFs grew to ₹1,279 billion ($14.2 billion), increasing India’s share in global gold ETF AUM to 2.5 percent in 2025 from 1.9 percent in 2024.
“Elevated gold prices have tempered gold jewellery purchase volumes and average ticket sizes, as consumers adhere to fixed budgets and shift towards lightweight jewellery with lower making charges,” Kavita Chacko, research head at WGC India, says in a note on its website.
So while 22K gold jewellery remains the preferred choice, demand for lower-purity jewellery, particularly 18k and 14K, has seen an uptick, reflecting heightened price sensitivity, she adds. “Needs-based wedding purchases remain steady, providing key support to overall jewellery demand,” she says.
Satish Dondapati, fund manager (ETF) at Kotak Asset Management Company (AMC), says central banks buying globally, along with portfolio diversification and reallocation, have also kept demand for gold sustained.
However, Dondapati says wealth managers continue to advise individuals to increase their exposure to gold and silver to 15 to 20 percent, from 5 to 10 percent historically. “We have never seen this type of global economic uncertainty, which continues to reflect in global gold prices,” he tells Forbes India.
With gold touching the record $5,000 level, Dondapati says “there is a potential for gold to rise further”. Even if global uncertainty and the escalation of wars subside, or there is a pause in rate cuts, global gold prices may come down for a short period. “But the fundamental support for gold remains. We may see a 10 to12 percent fall in gold prices from record levels, but over the medium (nine months to a year) to long term (three to five years), we are still bullish on gold reaching higher levels,” he says.
Dondapati says gold purchases from global central banks are expected to continue. But unlike the last three years up to 2022, this year could see slightly lower buying from central banks, he adds. “Russia has sold some of its gold to meet its fiscal deficit.”
Currencies, unlike gold, have been prone to policy changes and market fluctuations. For decades now, the dollar has been losing ground as a store of value to gold. Hong Kong-based precious metals broker J Rotbart & Co, in its blog, says the dollar’s share in global reserves fell to a 30-year low of 56.3 percent in mid-2025 from 71 percent in 1999, according to the IMF’s Currency Composition of Official Foreign Exchange Reserves report.
While it is tough to predict the dollar’s movement from here, experts do believe it will go lower. This is based on the assumption that the US will continue to print more dollars to service its debt of $37 trillion in 2025. This will cause further inflation and erode trust in the currency. In this scenario, gold continues to gain ground as an alternative.
For India, even as gold prices rise, investors should rule out the kind of high returns seen in 2025. ICICI Prudential AMC’s Haria advises new investors—who have never invested in gold or silver—to go through the systematic investment plan route. “They need to be patient,” he says. Haria also believes that Indian equities could emerge as a better risk-reward proposition, considering stock markets rose just 9 to 10 percent in 2025.
Kotak AMC’s Dondapati says new investors in precious metals should “make investments in a staggered manner”.
First Published: Feb 10, 2026, 14:27
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