'Commodity is new currency': Kotak Securities' Anindya Banerjee on how to invest in gold & silver in 2026

In an interview, ETMarkets spoke to Anindya Banerjee, Senior VP and Head of Commodity Research (Currency, Commodities and Interest Rates) at Kotak Securities, to decode what the sharp rally in gold and silver means for investors at current levels. Banerjee explained why precious metals continue to gain from a global monetary reset, how investors should approach gold and silver amid rising volatility and elevated domestic premiums, and what allocation strategy makes sense in the current cycle. He also shared key price levels to watch for gold, silver and crude oil as geopolitical risks remain high.

Edited excerpts:

Q: Gold and silver prices are soaring amid renewed trade tensions. Is it too late for investors to enter the precious metals trade?

No, the surge in gold and silver is being supported by a mix of structural and transitory factors. While geopolitical developments such as renewed trade tensions can provide intermittent momentum, the underlying driver is structural — a global monetary reset.

Hard assets like gold, silver, copper, and platinum are appreciating not due to a surge in global growth or demand, but because fiat currencies, particularly the US dollar, are being steadily debased relative to finite, real assets. In this environment, commodities are increasingly behaving like an alternative form of currency, with gold and silver remaining the most reliable monetary metals historically. This structural shift explains their outperformance across most asset classes over the past one and five years.

Q: What are your price targets for gold going forward?

A: Gold is currently trading around $4,700 an ounce, bringing it close to the earlier target of $5,000 that was set when prices were in the $4,300–4,400 range. Looking ahead, there is potential for gold to move towards $5,500 over time.

With US mid-term elections approaching, increased fiscal spending, potential tax cuts and pressure on the Federal Reserve to support debt markets could accelerate dollar debasement, a backdrop that remains favourable for gold prices.

Q: How do you view silver compared to gold at this stage?

A: Silver is especially attractive as it combines its role as a monetary metal with strong industrial demand. Prices could potentially rise another 60–70% this year, with scope to reach $160–180 per ounce over the medium term.

However, silver remains far more volatile than gold. To manage this risk while still capturing silver’s upside, a balanced allocation of around 60% gold and 40% silver is recommended.

Q: Is time-based consolidation likely in gold or silver in the near term?

A: Short-term corrections of five to eight days are normal and have already occurred. A prolonged consolidation would require a major trigger, most likely a sharp correction in global equity markets.

As long as global equities continue to rise on the back of liquidity expansion, gold and silver are likely to remain supported. A deep US equity market correction could temporarily drag silver down, as seen during earlier tariff-related selloffs.

Q: What strategy should investors follow at current levels?

A: A combination of lump-sum and SIP investing works best. Investing part of the allocation upfront helps avoid missing the rally due to fear of corrections, while SIPs allow investors to benefit from periodic pullbacks and manage volatility more effectively.

Q: Domestic silver prices are trading at a premium over global benchmarks. What is driving this shift?

A: This is a significant structural change in the global silver market. Traditionally, LBMA prices formed the benchmark, with local prices adjusting for duties and currency. However, over the last six to nine months, Asian markets, including Shanghai and India, have consistently quoted premiums of 8–10%, and at times even higher.

This premium persists because physical silver is no longer moving freely from Western vaults to Asian markets. Inventories at COMEX and LBMA are at record lows, limiting arbitrage opportunities. Asia is competing aggressively for physical silver, and India’s silver imports have risen sharply over the last five years.

Q: Are speculative flows also contributing to higher premiums?

A: Yes. Alongside genuine supply tightness, speculative and retail participation has increased. Silver ETFs are now trading at a premium over landed costs for the first time in several months, indicating renewed investor interest across both futures and ETF markets.

Q: How are current geopolitical tensions impacting crude oil prices?

A: Iran remains the most significant geopolitical risk for crude. Any escalation could lead to price spikes, given Iran’s role as a supplier of high-quality crude. Prices could briefly move towards $75–80 per barrel.

However, such rallies are unlikely to sustain due to weak global demand growth and strong non-OPEC supply, particularly from North and South America. Any spike is likely to be sold into.

Q: What key levels should investors watch in gold and silver this week?

A: Gold (MCX): Major support lies near ₹1,40,000. Investors should wait for pullbacks rather than chase prices. Upside targets are ₹1,60,000–1,65,000.

Silver (MCX): Volatility remains high. A good entry zone is ₹3,05,000–3,10,000, with a wider stop-loss below ₹2,80,000. Upside potential is ₹3,65,000–3,70,000.

Disclaimer: Recommendations, suggestions, views and opinions given by the experts/brokerages do not represent the views of Economic Times.