Gold at Rs 1.35 lakh and silver at Rs 2.3 lakh: Motilal Oswal sees sparkling rally ahead for bullion

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There is no sign of the explosive precious metal rally to subside any time soon. For those who think that the festive frenzy may subside by November and there may be some sort pf correction in gold and silver rates, latest Motilal Oswal report has a different projection.

As per the projections, gold prices may inch towards Rs 1.35 lakh in the long term. The prediction assumes that the USD-INR rate will stay at Rs 89.

Similarly, in the international markets, the yellow metal may hit the target of $4,500 per ounce, the report says

"Gold's stellar rally reflects a confluence of macro shifts, from fiscal uncertainty and a softer dollar to strategic diversification by central banks. Asia is emerging as the epicentre of this new monetary alignment," Manav Modi, Analyst, Commodities & Currencies, Motilal Oswal Financial Services was quoted as saying by news agency PTI.

So far, gold has seen a blazing rally, smashing all previous records. The data by Goodreturns shows that in major Indian cities, 24K gold is selling for Rs 1.29 lakh/10 grams.

Silver has also followed gold in this rally with prices already crossing the Rs 2 lakh mark in several cities such as Chennai and Hyderabad.

Motilal Oswal feels that the rally will continue well into 2026 as well.

The white metal is projected to surge to $75 per ounce. The rally is largely fuelled by strong industrial consumption demand and deepening supply deficit. This year, silver has outperformed gold in terms of returns and had gained over 60 per cent year-to-date. Motilal Oswal report predicts it to go up to Rs 2.3 lakh per kilogram in India markets.

The surge in gold prices has been fueled by a combination of global economic uncertainty, expectations of interest rate cuts by the US Federal Reserve later this year, and continued central bank buying, according to the report.

In contrast, silver's rally has been supported by a weak US dollar index slipping below 100, a relatively stable rupee, and China's expanding influence as a global gold custodian. Central banks purchased nearly 600 tonnes of gold in the first nine months of 2025, while global gold exchange-traded funds (ETFs) saw inflows of about 450 tonnes - the highest since 2020, the report noted.

"Central bank diversification is reshaping the bullion landscape. For the first time, institutional investors and sovereign buyers are aligned toward long-term value creation," said Navneet Damani, Head of Research (Commodities & Currencies) at Motilal Oswal Financial Services Ltd.

India, one of the world's largest consumers of precious metals, imported around 300 tonnes of gold and 3,000 tonnes of silver by the third quarter of 2025, underscoring resilient demand despite elevated prices. The sustained interest, MOFSL said, is driven by cultural affinity, higher disposable incomes, and gold's enduring appeal as a store of value.

With Diwali around the corner, Motilal Oswal expects India's gold demand to stay strong.