Rates, rupee and rising demand fuel 3-5 year bull case for gold and silver: Emkay Wealth

Gold and silver continue to command strong investor interest as the global precious metals rally extends into 2026, supported by a combination of macroeconomic trends, structural demand and long-term portfolio reallocation. Gold remains close to its recent record highs, while silver continues to trade at elevated levels following a decisive breakout, reinforcing the view that the current rally is fundamentals driven rather than speculative, states Emkay Wealth Management Ltd, the wealth management arm of Emkay Global Financial Services in its latest Navigator magazine on Gold & Silver.

According to Emkay Wealth, the current growth of precious metals continues to move forward because traders no longer focus on short-term market fluctuations. The current phase operates through continuous investment of assets in gold and silver which investors maintain in their diversified portfolio holdings because people now prefer these investments during times of worldwide instability. The first gold fund recommendation from Emkay Wealth arrived during FY22–23 and the company kept its positive outlook throughout the following years. The investment team started recommending silver to their clients during early 2025 because they recognized its increased value as a valuable metal and essential material for industrial operations.

“The current rally in gold and silver is not being driven by speculation, but by a structural shift in how investors globally are allocating capital,” said Dr. Joseph Thomas, Head of Research, Emkay Wealth Management. “With central banks continuing to accumulate gold, interest rate cycles turning supportive, and silver benefiting from rising industrial demand, precious metals are increasingly being viewed as core portfolio assets rather than tactical hedges. While short-term volatility is inevitable, the medium- to long-term case for maintaining measured exposure to gold and silver remains strong.”

Gold prices have been rising steadily for over eighteen months, supported by expectations of a softer US dollar amid potential interest rate cuts by the US Federal Reserve. Historically, lower interest rates and a weakening dollar have acted as strong tailwinds for precious metals. In addition, consistent buying by central banks and institutional investors since 2022 has provided durable price support and helped limit downside risks.

From a market-cycle perspective, both gold and silver have emerged from nearly a decade-long consolidation phase and entered a structural bull market around a year ago. Analysis of historical price behaviour over the past three decades suggests that such breakout phases typically persist for three to five years. Investors who allocated to gold over the past 12 to 18 months have already benefited from strong gains, which have been further enhanced for Indian investors by the depreciation of the rupee against the US dollar.

The industrial sector now demands silver because the renewable energy field together with electronic manufacturing and advanced manufacturing facilities require this metal. The current market rally shows different characteristics than previous market cycles which gives traders more reasons to believe in the ongoing price changes. The market continues to receive strong support from its fundamental demand base which drives its general upward trend though investors might take profits after substantial market rallies.

The speed of future market growth will depend on how world economies and their respective policies evolve, according to Emkay Wealth. Gold and silver prices will stay supported through global economic growth reduction together with central bank policies which maintain their monetary support approach. The US economic recovery which goes beyond expectations together with a strong dollar could create a short-term decrease in market progress. The rupee exchange rate stays vital for Indian investors because any sudden rupee value increase will reduce their investment returns although international market values stay unchanged.

For existing investors, the recommendation is to continue holding gold and silver as part of a diversified portfolio. Investors should distribute their additional funds throughout various market stages while they wait for price corrections to begin. Professional advisors need to evaluate investment portfolios which allocate more than 25 to 30 percent of assets into gold and silver for profit booking decisions regarding their strategic holdings.

New investors, who want to join after the market’s rapid growth, should base their decisions on strict investment guidelines. An allocation between five to ten percent of the total portfolio would serve as an appropriate range. The best approach to handle investments involves spreading them across different time periods because this strategy helps reduce market volatility through various investment options including physical gold and gold and silver ETFs and gold mutual funds and precious metal-linked investment products.