Gold and silver markets have experienced significant volatility in 2026, following a strong rally in the previous year. According to Motilal Oswal Financial Services Ltd.'s latest Precious Metals Quarterly report, the long-term outlook for these metals remains positive despite near-term challenges. The report, titled 'Gold's Rally: Deferred, Not Derailed,' notes that gold reached a record high of nearly $5,600 per ounce in January 2026 before correcting below $4,000, while silver surged beyond $100 per ounce before a sharp correction.
Global macroeconomic developments, shifting US monetary policy expectations, and geopolitical uncertainties have driven these price movements. In India, domestic premiums, imports, and physical buying volumes have been more influenced by festive demand than international price movements. Over the past decade, domestic Diwali gold prices have risen from approximately ₹30,000 in 2016 to nearly ₹1.50 lakh in 2026.
Investment demand has remained resilient, with global gold ETF holdings increasing by approximately 187 tonnes during August and September 2026, reaching a record 4,256 tonnes. In India, gold ETF inflows rose 71% month-on-month to ₹44.5 billion in September 2026, while silver ETFs attracted ₹19.7 billion. However, Indian gold imports moderated to US$1.8 billion in September from US$2.3 billion in August due to higher prices and measures to restrain bullion inflows.
Navneet Damani, Head of Research, Commodities at Motilal Oswal Financial Services Ltd., emphasized that gold retains its importance as a defensive asset amid global uncertainties. He noted that the near-term trajectory of gold will be sensitive to US interest rates, inflation trends, the US dollar, and real bond yields. The 25-basis-point rate hike by the US Federal Reserve in September, taking the policy rate to 3.75%, 4.00%, has reinforced concerns around tighter monetary conditions.
Looking ahead, the report maintains a positive outlook on precious metals, with a medium-term target for gold at $4,500, $4,700 per ounce. In the domestic market, assuming USD/INR at 96, the report sees ₹1,35,000 as a favourable accumulation zone, with a short-term target of ₹1,48,000 and a medium-term target of ₹1,60,000, ₹1,68,000. Silver offers greater upside potential but comes with higher volatility.