Gold approaches $4,550, silver surges over $80: Will the precious metals rally in 2026 continue?

The New Year’s holiday has just passed, and the precious metals market has already entered a frenzy. On December 29, 2025, spot gold prices climbed to $4,553 per ounce, with silver surging astonishingly to $83.9 per ounce.

Entering the first week of 2026, spot gold continued to consolidate at a high level above $4,450 per ounce, while silver retreated slightly but remained firm, and the enthusiasm in the precious metals market shows no signs of waning.

Market Performance

The precious metals market at the beginning of 2026 continued the strong rally from 2025. In 2025, gold prices increased by over 50% cumulatively, while silver’s annual gain reached as high as 102%.

In 2026, although silver prices pulled back somewhat, they still remained at high levels, making both gold and silver the star assets in investor portfolios. Long-term analysis shows that gold prices tend to perform strongly from November to January of the following year, with December showing the largest average increase.

This seasonal pattern aligns closely with market performance during this period, adding extra momentum to the precious metals market. The underlying reasons behind this phenomenon are closely related to year-end liquidity changes, institutional portfolio adjustments, and frequent risk events.

Driving Factors

The rise in gold and silver prices is driven by a series of macroeconomic and financial factors working together.

First, the US dollar has shown a clear weakening trend. Since the beginning of 2025, the US dollar index has fallen by 9%, potentially marking the worst annual performance in 8 years. When the dollar depreciates, gold priced in dollars naturally becomes more attractive. Market consensus expects that, influenced by the new Federal Reserve Chair’s possible dovish monetary stance, the dollar will further weaken, reducing the appeal of dollar-denominated assets for investors.

Meanwhile, global geopolitical tensions and uncertainties in the international trade environment provide a “certainty premium” for precious metals. UBS Wealth Management Asia-Pacific Investment Director’s Office pointed out that by 2026, the trend of de-dollarization, the independence of the Federal Reserve, and the sustainability of US fiscal policy will remain key concerns for investors, further boosting demand for gold investments.

Bank of America explicitly stated in its report that macroeconomic factors supporting this gold bull market include global central bank reserve diversification, concerns over US debt issues, and unconventional US fiscal policies, all of which are expected to persist into 2026.

Institutional Outlook

Regarding the trend of the precious metals market in 2026, major institutions show some consensus but also notable divergence. Gold has become a unanimously bullish target among institutions for 2026, with Goldman Sachs being the most optimistic. Goldman Sachs commodity strategist explicitly listed gold as the best choice in the entire commodities market for 2026, with a baseline forecast of $4,900 per ounce by year-end. JPMorgan is more aggressive, expecting gold prices to potentially rise to $5,055 in Q4 2026, and possibly further to $6,000 per ounce.

In contrast, institutions’ outlooks for silver in 2026 vary significantly. Most are cautious; Heren’s analysts warn that silver and other precious metals may at least decline in the first half of next year. They point out that the recent rapid price increase may lead to a slowdown or consolidation after a short-term rally. HSBC’s forecast is more conservative, raising the average price prediction for silver in 2026 to $68.25 per ounce, and $57.00 for 2027.

Supply and Demand

The supply and demand landscape of the precious metals market is fundamental to price movements. Regarding gold, institutions generally believe that central bank demand will remain strong. Goldman Sachs expects that in 2026, central banks worldwide will continue to buy gold vigorously, with an average monthly purchase of 70 tons, four times the pre-2022 average of 17 tons. According to the World Gold Council, global gold ETF holdings reached 3,932 tons at the end of November 2025, marking the sixth consecutive month of growth. The new purchases in 2025 exceeded 700 tons, making 2025 potentially the year with the largest increase in gold ETF holdings in history.

The supply and demand situation for silver is more complex. HSBC expects the silver supply gap in 2026 to narrow to 140 million ounces, further shrinking to 59 million ounces in 2027. Analyst Chen Sijie from Huatai Futures Research Institute believes that, amid the global decline in visible silver inventories, the incremental supply from silver mining will be relatively limited in the coming years, which may lead to a gradual emergence of supply-demand tensions. Guo Chaohui, head of commodities research at CICC, further pointed out: “The inventory shortage problem in the silver market is more severe now and has triggered a ‘short squeeze’ in London silver in October.” He believes that the strategic resource nature of silver is strengthening, and future risks related to tariffs and inventory concerns may be more serious than in the gold market.

Investment Outlook

For Gate users, understanding the role of precious metals in the current market environment is crucial. Precious metals, especially gold, serve as diversification tools in asset allocation and typically have low correlation with traditional financial assets like stocks and bonds. UBS Wealth Management Asia-Pacific Investment Director’s Office recommends that investors interested in gold allocate about 5%. Silver shows higher price elasticity and often outperforms gold in a bull market for precious metals. Analyst Chen Sijie from Huatai Futures believes that when the outlook for falling interest rates and liquidity easing heats up, funds may prefer to allocate to more volatile silver. He maintains the view that “the gold-silver ratio will continue to decline, with silver outperforming gold, and prices trending upward with high volatility.” It is worth noting that market volatility in precious metals has increased significantly. As market sensitivity to Fed monetary policy, geopolitical events, and macroeconomic data rises, prices may continue to exhibit high volatility.

Investment strategies should be more flexible, paying attention to changes in the gold-silver ratio. Since 2022, the gold-silver ratio has risen to the 85-90 range, well above the 75 average since 2010. Guo Chaohui expects the reasonable range for the gold-silver ratio to be 80-85. When this ratio deviates from normal levels, it may indicate that one metal is undervalued or overvalued relative to the other, providing potential trading opportunities for market participants.

Market enthusiasm has not diminished. Goldman Sachs commodity strategist predicts that in Q1 2026, gold prices may dip to around $4,200 per ounce, then rebound to over $4,400 in Q2, reaching a record high of about $4,630 in Q3, and climbing to $4,900 by the end of Q4. OANDA senior market analyst believes that in the first half of 2026, gold could approach $5,000 per ounce, while silver has the potential to reach around $90 per ounce. After retreating from the high of $83.9, silver consolidates at high levels along with gold, awaiting new market catalysts.