Precious metals have rallied sharply, with gold and silver reaching new highs, but they should be considered within a broader portfolio context.
- The “debasement trade” reflects concerns over a weaker U.S. dollar, lower interest rates, and inflation. Uncertainty is heightened by a new Fed chair in May and a Supreme Court case on presidential authority over Fed governors.
- Investors favor gold and silver as stores of value amid stock market volatility, while central banks are boosting reserves due to geopolitical and dollar concerns.
- Geopolitical tensions—from Greenland to Venezuela and NATO—support safe-haven demand.
- Industrial demand for electric vehicles, solar panels, and AI hardware adds further support beyond traditional safe-haven appeal.
- Prices are difficult to predict; gold and silver experience boom-and-bust cycles, as seen in the decades following the 1970s–1980s rally.
