Low volumes and margin increases contribute to the volatility of the metals sector
Kedia pointed out that trading volumes remain subdued due to the holiday period and are likely to remain low until early January.”CME margin increases on both gold and silver drove profit booking. Markets were severely overbought, so a correction was inevitable,” he said.
He added that concerns about global growth, including commentary from industry leaders and China’s 2026 export policy review, also weighed on sentiment.
Historically, similar corrections have occurred before. “In October, silver fell almost 18% and gold corrected about 13%. This kind of volatility is not new when markets are overheated,” Kedia noted.
Outlook for gold and silver: corrections likely, upside potential intact
While Kedia does not expect a repeat of the sharp rally of 2025 in 2026, he believes there is still longer-term upside potential.
Gold (international):
In the short term, support is expected around $3,800, while the uptrend could extend to $4,850 over time if rate cuts continue and macro risks reemerge.
Silver (international):
After reaching the long-term target of $75-80 much earlier than expected, silver could correct towards $60 before attempting a gradual move towards $85-90.
“Silver has achieved multi-year targets in one year. Now the market needs time to digest the gains,” he said.
Crude Oil: Oversupply is upside down
On energy markets, Kedia said the near 18 to 20% drop in Brent crude reflects a well-supplied market.
“OPEC+ actions have already been discounted. US production remains high and demand has lagged,” he said.
For the first quarter of 2026, he expects crude oil trading to be within a narrow range of $58-66 per barrel, barring major geopolitical shocks involving regions such as Russia-Ukraine, China-Taiwan or Venezuela.
Base metals poised for rally in 2026
Kedia believes base metals have lagged precious metals and could attract new flows if interest rate cuts support consumption.
Copper: Target of $13,500 internationally by 2026; around ₹1,400 in the domestic market
Zinc: Considering almost $3500 globally and ₹340 domestically
Aluminum: Domestic prices could rise to ₹320
“Consumption-driven demand from infrastructure and manufacturing has not yet fully played out. Base metals still have room to operate,” he said.
Steel Outlook: Cautious optimism
On ferrous metals, Kedia said domestic steel prices have recently risen to ₹41,000 per tonne, but high inventories and ample supply may limit the sharp increase.
“Steel could go towards ₹45,000, but we don’t expect the kind of fireworks you see in silver or copper,” he said.
View of the market
Kedia summarized the outlook by advising caution in the short term but optimism in the medium term.
“2026 will be a year of consolidation rather than runaway rallies. Corrections should be seen as healthy, especially in precious metals, while base metals could gradually take the lead,” he said.
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