The glittering run in gold and silver that marked 2025 has somehow lost its momentum in 2026. After reaching historic highs in January 2026, both metals have pulled back sharply, leaving investors wondering whether it’s the right moment to enter the market. Spot gold is trading over 10 per cent below its all-time peak of $5,595, while silver has slipped nearly 35 per cent from $121, highlighting a sharp reversal from last year’s extraordinary gains.
Goldand silver started the new year on a strong footing, but the momentum halted by the end of January, recording one of the steepest declines in recent memory. Investors who missed last year’s rally may find current prices tempting, but experts caution that jumping in now requires careful assessment.
“New investors should not enter with large weights or allocate fresh funds at this time. At best, to avoid FOMO, start a token SIP if you can’t control your urge to participate. Make sure the position doesn’t hurt your portfolio if precious metal prices see a drawdown,” advised DSP Mutual Fund, according to a Mint report.
Central Bank Buying Momentum Slows
A major driver behind the gold rally in recent years has been central bank purchases aimed at diversifying away from the US dollar amid rising debt concerns. However, central bank buying began to decelerate in 2025, with purchases falling 21 per cent, marking the first year since 2022 with under 1,000 tons acquired.
“Price volatility causes most of these investment purchases to turn into net sales. This weakens the case for continued momentum in the gold price,” noted DSP MF, highlighting the shift from institutional purchases to ETF-driven demand. Unlike central banks, ETFs are momentum-based and react strongly to short-term returns, which may not be sustainable.
Investment Outlook: Proceed With Caution
High real interest rates and benign inflation make the current environment less favourable for precious metals. Experts recommend waiting for better price levels or employing gradual investment strategies. Pranav Mer from JM Financial suggests adding gold in a staggered manner during corrective dips, with strong support seen at $3,900-$4,000 and resistance at $5,600 per ounce. For silver, the outlook remains uncertain, with support around $48-$52.
The key takeaway for investors: patience is essential. Rushing into gold or silver now could expose portfolios to volatility, whereas measured entry or waiting for fresh triggers may offer better long-term results.
She is working as a Chief Copy Editor at Times Now’s Business Desk, where she covers key developments in the stock market, Indian corporates across se...View More
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