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Informist, Wednesday, Dec. 3, 2025

 

--Kotak MF: See gold, silver rising more on sustained central bank buying

--Kotak MF: Geopolitical risks to support gold prices going ahead

MUMBAI – Gold and silver prices will continue to rise in 2026, supported by sustained buying by central banks globally, according to Kotak Mutual Fund. "For the last three years, central banks are buying close to 1,000 tonne gold every year and this year (2026) also the trend is likely to be similar," Deepak Agrawal, chief investment officer-fixed income and head of products, Kotak Mahindra Asset Management Co., said.

 

"The gold as a percentage of India forex reserves in 2022 was close to 6%. Today, we are close to 12%," Agrawal said at a press conference to present the annual outlook for 2026. In the case of silver, Agrawal said industrial demand, especially from growing sectors such as electric vehicles, solar, aerospace, and automobiles, is likely to boost silver prices in the coming year. Since 2023, prices of both gold and silver have hit multiple record highs because of geopolitical tensions, trade uncertainties, and firm demand from central banks globally.

 

Gold futures contract traded on the Multi Commodity Exchange of India have risen over 72% so far in 2025. On Oct. 17, the most-active February gold contract hit a fresh record high of INR 134,024 per 10 grams. Similarly, silver futures have risen over 107% so far this calendar year. The most-active March silver contract Wednesday hit a new all-time high of INR 180,748 per kilograms.

 

"...the man (referring to US President Donald Trump) who wants a Nobel Peace Prize on one side is also asking Pentagon to start nuclear testing. So, geopolitical risk is likely to continue and which is also likely to favour gold," Agrawal said. Further, limited supply of the yellow metal will also support prices, he said.

 

"If an investor is investing in multi-asset allocation fund or directly into ETFs, our suggestion is please ensure that you have a 10% allocation either directly or indirectly (in precious metals)," Agrawal said.

 

Kotak Mutual Fund was the first domestic fund house to suspend lump sum investments in Kotak Silver Exchange-Traded Fund Fund of Funds on Oct. 9, as domestic silver prices then were at a premium to international prices. "Post Dhanteras, when the premium (on silver) was down (at) 0.5-1.0%, we had again opened the fund for subscription," Agrawal said. "Luckily, during the same time, we saw close to 10% correction in silver prices. So in all, because of our measure, (returns were) close to 15% for investors," he added.  End

 

Reported by J. Navya Sruthi and Anjana Therese Antony

Edited by Subhojit Sarkar

 

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