Gold and silver ETFs have experienced significant surges, mirroring the sharp rise in precious metals prices. On January 28, 2026, these ETFs jumped up to 5%, prompting analysts to consider whether investors should shift assets from equities to precious metals. Some leading gold exchange-traded funds, like the Axis Gold ETF, Union Gold ETF and 360 One Gold ETF, have slipped at least 10% each.
The rally in precious metals is attributed to several factors, including heightened geopolitical risks stemming from Middle East tensions and potential tariff threats from US policy changes. These factors position gold and silver as safe-haven assets for investors. A weakening dollar and increasing geopolitical tensions, including increased tensions with Iran and European nations, and interest rate cuts in 2025 have also contributed to the price rally. Demand for silver has further increased due to its use in the tech industry.
Ross Maxwell from VT Markets noted that several markets, especially in the AI and tech sectors, face tighter conditions due to elevated valuations, rising debt concerns, and earnings sustainability. He added that slowing growth signals, persistent geopolitical risks, and uncertainty around interest rates in India make gold and silver attractive as defensive assets. Maxwell stated that precious metals benefit from their role as stores of value, especially with real yields showing signs of peaking and central banks maintaining strong gold purchases. Silver also benefits from industrial demand related to energy transition and electronics.
Abhinav Tiwari, Research Analyst at Bonanza, believes that the current environment has created a perfect storm for precious metals.
However, experts advise caution, suggesting that the current price levels might not be the optimal entry point for new investments. Subhendu Harichandan, Executive Director at Anand Rathi Wealth, suggests investment decisions should be based on long-term portfolio objectives and how these assets behave within that portfolio, rather than recent price movements.
In 2025, gold increased as much as 65% in value, while silver rose a staggering 150%. The metals continued their surge in the first few weeks of January, hitting highs above $5,600 and $120, respectively. Spot gold prices on the Multi Commodity Exchange of India (MCX) showcased significant growth, with prices rising from Rs 81,028 on January 30, 2025, to Rs 1,67,095 on January 29, 2026, giving investors a 106.22% return in one year.
The Economic Survey 2025-26 attributes record gold prices in 2025 to US tariff announcements, global policy uncertainty, and a weakening dollar. Despite a recent dip, the survey suggests precious metal prices may continue to rise due to sustained demand as safe-haven assets amid global uncertainties.
On the other hand, gold and silver faced a significant price drop late last week. Silver's price dropped as much as 30%, and gold's price fell nearly 10%, a dramatic reversal from a price surge that saw silver top a record $120 last week and gold surge past $5,600 for the first time. Gold extended its selloff, falling as much as 10% on Monday and leaving prices nearly 20% below the all-time high reached just two sessions earlier. Silver fared even worse, slumping up to 16% after suffering its largest intraday drop on record at the end of last week.
Analysts suggest the drop might be short-lived. JPMorgan analysts remain bullish on gold, raising their year-end forecast for the precious metal to a record $6,300, citing strong demand from central banks and investors. Michael Hsueh, a metals analyst at Deutsche Bank, also suggested the downturn would be short-lived, retaining the bank's year-end gold price prediction of $6,000 and blaming volatility for the price dip rather than a collapse of confidence in gold.
Extreme gains in silver prices are driving massive volumes in the iShares Silver Trust exchange-traded fund, with almost $40 billion in turnover recorded on Monday. Having more than doubled in 2025, silver has continued its extraordinary rally in January, soaring nearly 60%.