Gold, Silver Price Outlook: What Will Drive the Next Move? Kotak Neo Research on Central Bank Buying, Silver Rally and 2026 Targets

Gold and silver prices came under pressure on Friday, September 11, with gold extending its decline after a weak finish in the previous session. On the MCX, Gold October futures dropped below the ₹1.51 lakh per 10 grams mark in early trade.

The contract touched an intraday low of ₹1,50,695, marking a fall of ₹1,646 from Thursday’s close of ₹1,52,341. Around 10 a.m., MCX Gold October futures were quoted at ₹1,51,474, down ₹867, or 0.57%.

The latest decline follows a sharp move lower in the previous session. MCX data showed Gold October futures settling at ₹1,52,341 on September 10, compared with ₹1,53,763 a day earlier.

Silver prices also remained in focus as traders assessed movements in the dollar, US Treasury yields and expectations around the Federal Reserve’s monetary policy. The outlook for precious metals continues to hinge on the direction of US interest rates, while demand from central banks remains an important support for gold. Silver also draws support from its industrial applications.

We spoke to Anidya, Head of Research – Currency, Commodities and Interest Rates from Kotak Neo Research to understand what could drive gold and silver prices from here, whether central-bank buying can continue, and what investors should watch over the next 6-12 months.

Q. Gold prices have rallied sharply. What could be the next major catalyst, and what could trigger a correction?

Gold’s rally is being supported by both structural and cyclical factors, Anidya believes. Central-bank demand has emerged as an important structural support, with several central banks diversifying part of their dollar reserves into gold as they seek to reduce their dependence on the US dollar.

China is a notable example. Its central bank has bought gold for 22 consecutive months and added 20.2 tonnes to its reserves in August. Such purchases are less sensitive to short-term price movements and, therefore, can provide a floor for the metal.

The near-term picture, however, is more complicated. Gold does not generate interest income, which means higher US yields can put pressure on the metal. The rise in oil prices following the West Asia conflict has also raised concerns about commodity-led inflation. At the same time, expectations around US monetary policy have become less supportive for gold, with the 10-year US Treasury yield moving towards 4.80%.

Looking further ahead, Anidya sees currency debasement and concerns over US debt sustainability as potentially more important catalysts. The US Treasury’s increased reliance on shorter-term borrowing, alongside the broader global debt build-up, could reinforce demand for gold as a store of value.

Another potential source of upside is a return of Western institutional money. These investors remain structurally underweight gold, and a shift in allocation towards the metal, alongside continued official-sector purchases, could push prices to new highs.

The correction risks, however, are equally important. A genuine de-escalation in West Asia that brings oil prices sharply lower, a softer-than-expected inflation print that removes pressure for higher rates, or a sustained rally in the US dollar could weigh on gold. Anidya sees a combination of a hawkish Federal Reserve and falling oil prices as particularly negative for the metal.

Q. Can central-bank buying of gold continue?

Anidya expects central-bank buying to remain strong because the demand is increasingly strategic rather than driven by gold’s short-term price movements. Reserve diversification has been a developing trend since the global financial crisis and accelerated significantly after the Covid-19 pandemic.

The World Gold Council’s revised estimate put central-bank purchases at 57 tonnes in the first quarter of 2026, while buying recovered in the second quarter. Its outlook also points to another strong year, although purchases could remain below the levels recorded in 2025.

China’s continued purchases reinforce the broader trend. Anidya expects the official sector to remain a source of support for gold, although the pace of accumulation will eventually moderate. The broader de-dollarisation process, in his view, could continue through 2030-32.

But the bigger potential demand trigger may come from another source. Western institutional investors remain relatively underweight gold, while US-listed gold ETFs have seen outflows even as central banks continued buying.

“If those flows reverse,” Anidya believes, the scale of potential demand could be significantly larger than the incremental buying coming from central banks alone.

Q. Silver has significantly outperformed gold recently. What is driving the outperformance?

Silver’s recent performance cannot be explained simply by the broader precious-metals rally. Unlike gold, silver has both monetary and industrial characteristics, making it more sensitive to the global industrial cycle.

Anidya points out that silver is extensively used in solar panels, electronics, electric vehicles and other industrial applications. This creates a structural difference between the two metals: silver is consumed in many of these applications, while gold is not similarly depleted.

That industrial exposure can become a major advantage when economic activity and investment in new technologies are strong. The recent strength in base metals, particularly copper, is an indication of the broader industrial theme supporting silver. LME copper has moved above $14,700 a tonne, coinciding with silver’s recent outperformance.

There is, however, a downside to silver’s industrial exposure. Demand is more price-sensitive, and high prices can encourage substitution, delay purchases and increase scrap supply. Anidya points to the sharp silver rally seen in December 2025 and January 2026 as an example of how quickly this dynamic can emerge.

For silver to sustain its outperformance over several years, a strong base-metals cycle will be important. Anidya expects electrification and grid investment to provide such support over a longer five-year-plus period. But the higher return potential comes with greater volatility, and silver is likely to continue experiencing sharper moves than gold.

Q. Are gold and silver essentially the same trade for investors?

Anidya does not view gold and silver as interchangeable investments. While both benefit from monetary uncertainty and precious-metals demand, their underlying characteristics are different.

He compares gold with a large-cap asset and silver with a mid-cap asset. Gold is primarily a monetary asset, whereas silver combines monetary demand with industrial consumption. That makes silver more volatile and leaves it more exposed to changes in economic activity.

The difference was evident in the recent correction. From their January peaks, gold declined about 21%, while silver fell roughly 46%. Historically, silver has also experienced drawdowns of 50%-75%, considerably more than gold.

For investors holding both metals, Anidya therefore favours a higher allocation to gold. A 60:40 or 70:30 split between gold and silver would be appropriate depending on risk tolerance, while investors with a higher appetite for volatility could increase their silver allocation.

The choice also depends on the investment objective. Traders may prefer silver because of its larger price swings, while investors looking for exposure to the monetary and reserve-diversification theme may find gold more suitable. Silver can also offer a stronger thematic play for investors who have a high conviction in solar and electrification.

Q. How is jewellery demand holding up despite high gold prices?

Anidya believes the perception that gold is currently at a record high needs some qualification. MCX gold had peaked at ₹1,80,779 per 10 grams in January, compared with around ₹1,52,350 at the time of the interview. International gold had similarly peaked at $5,608 an ounce before correcting towards $4,420.

Despite the correction, high prices have affected physical jewellery demand. World Gold Council data showed global jewellery volumes falling 11% in 2024 to 1,877 tonnes, with the decline continuing in 2025. Volumes fell another 23% year-on-year in the first quarter of 2026, while second-quarter demand at 278 tonnes was the lowest quarterly level since the pandemic.

China’s jewellery demand fell 32% in the first quarter, while India recorded a 19% decline.

However, the value of jewellery purchases has held up much better. Global jewellery spending increased 18% in 2025 to a record $172 billion and reached $47 billion in the first quarter of 2026. Second-quarter spending stood at $40 billion, up 14% from a year earlier.

India offers a clear example of the difference between volume and value. While jewellery volumes declined 19% in the first quarter, spending rose 47%.

The reason, Anidya explains, is that Indian consumers tend to budget for jewellery by value rather than weight. When gold prices rise, consumers can opt for lighter pieces or lower-carat jewellery rather than completely defer the purchase.

This has also allowed jewellery companies to maintain strong revenue growth despite weaker volumes. The concern for retailers, however, is that elevated gold prices increase inventory carrying costs and could eventually put pressure on discretionary spending if prices remain high for a prolonged period.

Q. What are your gold and silver targets for the next 6-12 months, and which levels should investors watch?

Anidya’s broader precious-metals view remains centred on de-dollarisation and a transition towards a more multipolar monetary system. Against that backdrop, the expectation is for both gold and silver to move higher over the next 6-12 months, although the path is likely to remain volatile.

For gold, the target is a fresh all-time high above $5,600 an ounce. On the MCX, that translates to roughly ₹1.60 lakh-₹1.65 lakh per 10 grams.

For silver, the target is $71-$72 an ounce, equivalent to around ₹2.45 lakh-₹2.55 lakh per kg on the MCX.

In the near term, Anidya is watching $4,280-$4,300 as the key support zone for gold, followed by resistance at $4,450 and $4,520. A break above $4,520 would strengthen the bullish setup, while a fall below $4,280 could extend the correction. On the MCX, ₹1.50 lakh per 10 grams is the important support level.

For silver, $65-$65.30 is the key support area, while $67.50 is the immediate resistance. A sustained move above $67.50 could open the way towards $70, whereas a break below $65 could bring $63 into focus. The corresponding MCX support is around ₹2.30 lakh per kg.

Anidya’s longer-term targets are substantially higher. By 2030-31, the structural view is for gold to potentially reach $10,000-$15,000 an ounce and silver to reach $150-$200.

For investors, however, the strategy is not to chase sharp rallies. Anidya favours staggered accumulation during corrections, particularly while the Federal Reserve remains relatively hawkish and precious metals continue to experience large price swings.

Q. Gold vs silver: What should investors watch from here?

The immediate direction of gold and silver will continue to depend on US inflation, Fed policy expectations, Treasury yields, the dollar and crude oil prices. Gold is currently benefiting from a weaker dollar, but higher yields and inflation concerns can still create short-term volatility.

The longer-term setup, however, remains different for the two metals. Gold has the stronger structural support from central-bank reserve diversification and potential institutional reallocation, while silver offers additional exposure to industrial demand, electrification and the base-metals cycle.

For investors, that makes gold the relatively steadier play, while silver offers greater upside potential but comes with significantly higher drawdown risk.

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