What's next for the bull market, bonds, gold and silver prices? Xelion announces that the markets “will definitely be interesting”
This will be another year of a bull market, but it will be marked by much greater volatility and the advantage of small and medium-sized companies – predict experts from the Xelion Investment House. Treasury bonds will remain attractive, and among metals it will be more profitable to bet on gold than on silver, which turned out to be the investment hit of 2025.
Experts predict that 2026 will bring a continuation of the upward trends on global stock exchanges, although with significantly higher volatility.
– This will be the fourth year of the bull market on Wall Street. We assume that It will definitely be more interesting – both in positive and negative termsthat meaning. We do not assume the end of the upward trend in the US, although we expect that there may be double-digit corrections, caused, for example, by weaker results of technology giants – says Patryk Pyka, director of the analysis and investment advisory team of Xelion Investment House.
“It's not a bubble,” but now it's time for smaller companies
Despite high valuations, especially of technology companies, specialists are reassuring about the alleged bursting of the AI bubble.
– This is not a bubble because artificial intelligence is something that will stay with us for the rest of our lives. The fact that it is very expensive for several of the largest companies does not mean a bubble – explains Piotr Kuczyński, analyst at DI Xelion.
However, it warns that companies known as the so-called The Magnificent Seven (or Ten – after including Broadcom, Cisco and Palantir) may experience upheaval. – The largest companies will be susceptible to corrections when investors come to the conclusion that the huge funds invested in AI will start to pay off in a much longer time than currently expected – he adds.
According to Xelion experts, corrections in quotations in line with historical patterns should be expected only in the second or third quarter. In the current quarter in accordance with an internally developed forecasting model they expect the S&P 500 index to increase by 3.5%.
The attention of investors in the US may be shifting towards medium and small companies, not only from the second row of the S&P 500, but also even smaller ones from the Russell 2000 index.
– The two previous years were years of false starts. Expectations towards these companies were already high and their valuations were attractive, but these entities did not deliver results. TThis year, however, may be a breakthrough. Debt servicing costs, which are now falling due to interest rate cuts, are a “to be or not to be” factor for smaller companies.and an additional stimulus for them will be the One Big Beautiful Bill, supporting local businesses in the United States (the so-called big, beautiful bill pushed through last year by Donald Trump – ed.) – notes Patryk Pyka.
According to market forecasts, the earnings per share of companies from the Russell 2000 index may increase by as much as 59% this year (compared to 1% in 2025), while in the case of companies from the S&P 500 it is to be 13%.
– Hopes for small companies in the US have been enormous for years, but now they may finally come true – points out Piotr Kuczyński.
Asian hedge on America
Xelion analysts also place their hopes on shares from the largest Asian economies, especially China. – We expect that Beijing will decide on strong fiscal stimulus this year to stimulate domestic consumption. This is becoming a necessity in the face of weakening economic data and global protectionism. Chinese shares are also an attractive investment opportunity due to their moderate valuations relative to developed markets and can act as a hedge in the ongoing AI technological race, says Patryk Pyka.
This is about securing against situations such as those at the beginning of last year, when the appearance of the Chinese low-cost DeepSeek language model temporarily significantly shook the quotations of technology companies in the US.
Overall, in emerging markets, among which China is leading along with India, Xelion analysts estimate the growth of indices in the first quarter at 7%. One of the factors that will support emerging markets should remain a weak dollar this year, which, according to Xelion, may continue to lose against other currencies.
On developed markets, Xelion analysts see great potential in shares from Japan, which, in their opinion, may once again perform better than Western European securities this year. Local companies will not be prevented by further gradual increases in interest rates by the Bank of Japan.
Waiting for a truce on the WSE and the potential for “teddies”
Geopolitics may be a very important factor on the domestic market. Xelion experts predict that by the end of this year a ceasefire plan in Ukraine will be developed, and this will trigger a positive reaction from foreign investors. This may lead to a further reduction of the discount on the WSE quotations compared to other emerging markets, which, despite last year's increase in WIG20 by as much as 45%, has still not disappeared.
– This latest wave of inflows under a potential truce may still push Polish blue chips higher, but we would treat it as the last moment to switch to the small and medium-sized company segment – notes Patryk Pyka.
As he notes, the price to book value ratio (P/WK) for small companies (sWIG80) compared to large companies (WIG20) is significantly below the historical average. Smaller companies have therefore become relatively cheap and attractive for investment. – The positive scenario for the “teddies” is supported by economic fundamentals, including the projected GDP growth (approx. 4%), slowing down the growth rate of labor costs, falling inflation and the prospect of interest rate cuts – says Patryk Pyka.
Twice as much as on the deposit
The domestic debt market is also very optimistic. According to Xelion experts, funds investing in longer-term securities may generate rates of return of 6-8% this year, and those focused on short-term debt, which is safer and conservative, may achieve 5-5.5%.
– A profit of 7-8% with low risk will beat deposits twice, which will be enough for many clients – says Patryk Pyka.
Xelion experts expect that the first half of the year will be better for treasury securities. In the coming months, further and last interest rate cuts by the Monetary Policy Council are to be made by the Monetary Policy Council, which will bring the main rate to 3-3.5%. This, in turn, will result in a decline in the profitability of securities, i.e. an increase in their market valuations (the effect is greater in the case of long-term securities).
– Bonds are an asset class in which we see the best ratio of potential profit to risk for the first half of the year – point out Xelion experts.
Central banks are behind gold, and speculators are behind silver
Their favorite assets for this year also include gold, the price of which has the potential to rise above USD 5,000 per ounce – or at least 10% from recent records of around USD 4,500.
The basis for such forecasts is primarily the continuing demand from central banks. – The World Gold Council conducts annual surveys and asks central banks, among others: about how they view building gold reserves. And over 40% of central banks declare that they would like to increase them, notes Patryk Pyka. He also cites other data, according to which demand from central banks is responsible for as much as 80% of the increase in the gold price from 2022. – This is a completely new factor that has not existed on this scale before – he emphasizes.
Although gold gained as much as 65% last year, it was eclipsed by silver, whose prices rose by almost 150%. However, Xelion analysts do not expect the silver boom to continue this year. Patryk Pyka points out that every time the ratio of the silver to gold price drops sharply, as it happened last year, the silver price regresses in the next period. Moreover, this market is not operated by central banks, but mainly by industry – which may limit demand at current prices – and speculators.
– What has been happening on the silver market recently is crazy to me. With movements of around 10% a day, it is no longer a transactional market and has become purely speculative – emphasizes Piotr Kuczyński.
Last year, the opposite of gold and silver on the commodity market was crude oil, which dropped in price (Brent grade) by almost one fifth, to around USD 60 per barrel. Xelion analysts believe that prices may soon reach a bottom around USD 50-55, after which they should start to rebound, caused by production cuts by OPEC or American companies, for which the extraction and processing of raw materials at current rates is becoming unprofitable.
Consulting is growing
Xelion Investment House entered 2026 with an ambitious goal. – We are approaching the threshold of PLN 9 billion of assets invested in funds by clients through us. I believe that this threshold will be overcome as soon as possible, perhaps it has already happened, but we do not yet have full data for the end of 2025 – he says President of Xelion Krzysztof Prasał.
Investment advisory services are very popular, with over PLN 2 billion invested so far. One of them is the Prestige service (with an entry threshold of PLN 200,000), in which the model balanced portfolio brought customers a profit of nearly 14% last year. As Krzysztof Prasał emphasizes, this service is highly ergonomic, allowing the client to rebuild the portfolio with one click based on quarterly recommendations prepared by Xelion.
