Key Points
- Gold and silver started 2026 with strong gains after their best year since 1979.
- A weaker dollar, lower interest rates, and geopolitical tensions are fueling the rally.
- Goldman Sachs predicts gold could reach $4,900 an ounce in 2026.
- There are short-term concerns that a market rebalancing could pressure silver prices.
Gold and silver kicked off the new year with a bang, continuing the massive rally that made 2025 their best year since 1979. Gold prices climbed to nearly $4,375 an ounce, while silver jumped more than 2%. This strong start comes after a wild ride last year, during which both metals reached a series of all-time highs.
The main drivers of this strong performance are a weaker U.S. dollar, lower Federal Reserve interest rates, and rising geopolitical tensions. Central banks around the world have also been buying up gold at a record pace.
Silver, in particular, has been on a tear. In addition to the same factors that helped gold, silver has benefited from fears that the Trump administration might impose new import tariffs on the metal.
Looking ahead, many experts believe the rally has more room to run. Big banks like Goldman Sachs are predicting that gold could even reach $4,900 an ounce in 2026. They note that the Fed is expected to cut interest rates again and that President Trump is likely to appoint a new Fed chair who will be even more supportive of lower rates.
However, there is some concern in the short term. One analyst warned that a major rebalancing of major investment indexes could prompt some funds to sell their silver holdings. This could cause a “dramatic” price drop over the next couple of weeks. With many traders still on holiday, any big moves could be amplified by the thin market.
For now, though, the momentum is still on the side of the bulls. With the dollar starting the year on a weak note and other metals such as platinum and palladium surging, it seems investors are still looking for safe places to park their money.
