Justin Lin
After an extraordinary run in 2025, precious metals have returned to the centre of investor attention in Australia. Gold and silver may have shared the spotlight last year, but they arrived there for very different reasons, and those differences are likely to shape their paths through 2026.
Even so, the year has begun with unmistakable momentum. Gold has climbed to $US4760 ($7000) per ounce as of 20 January, while silver has surged more than 30 per cent in just 12 trading days, powering to a new all-time high above $US94.
The key question for Aussie investors is whether these metals still have a role to play in the portfolio after such powerful rallies. In our view, gold continues to stand out as one of the more compelling investment themes for 2026, supported by macroeconomic uncertainty and persistent geopolitical risk.
Silver, by contrast, offers opportunity but demands a higher tolerance for volatility, with a far bumpier path likely along the way.
Gold: strong foundations
Gold had a remarkable 2025. Its value increased by around 65 per cent – the strongest rally since 1979 – outperforming almost every major asset class. That kind of performance often raises concerns about whether the gains have already been made.
The drivers of gold’s strength last year remain, and in some cases, they are becoming more entrenched. At its core, gold tends to thrive in uncertainty.
After an exceptional 2025, neither metal is without risk.
Last year investors were grappling with falling US interest rates, heightened geopolitical tensions, ongoing concerns about currency debasement and record levels of central bank buying. These factors combined to create a rare alignment of tailwinds, and many of them remain firmly in place today.
One of the most important drivers for gold has been the steady accumulation by central banks. The motivation is strategic rather than speculative. Ongoing geopolitical assertiveness from the Trump administration, combined with concerns among emerging markets about over-reliance on the US dollar, continues to underpin demand. China’s central bank has reported more than a year of consecutive gold purchases, underlining that this trend is far from over.
On the retail side, demand from Asia for gold ETFs is booming. In the December quarter of 2025, Asian gold ETFs attracted a record $18.5 billion in inflows, accounting for more than half of global demand during what was already the second-strongest quarter for gold ETF inflows on record.
This shift is particularly meaningful as just a few years ago, Asian gold ETF activity was negligible. Today, these cash-rich and increasingly sophisticated investors are emerging as a genuine price-setting force.
As gold becomes a more mainstream portfolio allocation in the region, it reinforces the case for higher prices.
Silver: spectacular gains but a bumpier road
If gold had a strong 2025, silver was in a league of its own. Its value soared 150 per cent last year. However, that level of performance comes with a catch: much of it was driven by temporary supply dislocations rather than a simple surge in underlying demand.
Silver’s outlook for the next 12 months is therefore best described as volatile. Prices are likely to remain closely linked to gold, but with sharper moves in both directions.
Last year’s meteoric rise was fuelled by three overlapping forces. First, tariff-related fears linked to US Section 232 investigations prompted large volumes of silver to shift onto US exchanges. Second, exceptional jewellery demand in India ahead of Diwali drove local premiums to unprecedented levels. And finally, speculative ETF flows amplified momentum as silver regained retail attention.
These forces drained liquidity from London, where global benchmark prices are set, pushing silver to record highs.
The biggest near-term risk for silver lies in the resolution of US tariff investigations. If silver is ultimately excluded from tariffs, the easing of anxiety could trigger rapid destocking in the US, leading to a sharp price pullback before the market stabilises.
While that sounds negative, it may also create opportunity. A deeper correction that pushes the gold-to-silver ratio back into historically stretched territory could present a more attractive entry point for long-term investors.
Beyond the volatility, silver’s longer-term case remains intact. Its close relationship with gold means it often benefits from the same macro forces, while its industrial uses, particularly in technology and energy applications, add an extra layer of demand over time.
For those investors eyeing gold and silver in 2026, the message is nuanced. Gold looks well positioned for another strong year, supported by interest rates, central bank demand and structural shifts in investor behaviour. Silver, while offering potentially higher growth, comes with greater uncertainty and sharper swings.
After an exceptional 2025, neither metal is without risk. But in a world still marked by geopolitical tension and economic adjustment, gold in particular continues to shine as an asset that can offer both resilience and opportunity in the year ahead.
Justin Lin is an investment strategist at Global X ETFs Australia.
- Advice given in this article is general in nature and not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making financial decisions.
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