“Gold is money. Everything else is credit.” – John Pierpont Morgan
While US equity markets have been treading water more than rallying this year, one area of the market that continues to be strong is precious metals. Even with the Silver & Gold meltdown a few weeks ago, which saw Silver prices plummet -30% in a day and Gold -17% dragging down most precious metals, both commodities are still strongly positive on the year and outperforming stocks, bonds, real estate, agricultural commodities and energy commodities. We feel precious metals could continue to be an asset to own in 2026 and march to much higher highs due to 3 main factors:
1. Inflation:
Continued investor concerns that inflation could re-accelerate due to tariffs or higher input costs driven by higher commodity prices for oil, gas, steel, rebar and copper. The ever-changing tariff landscape also concerns investors, though that cost has not proven to be inflationary in 2025/2026 so far. But the fear of a 1970’s-1980’s reacceleration of inflation causes investors to hedge.
2. US Dollar:
The US Dollar lost -9.65% in 2025 and fell sharply in January losing another 2% before catching a bit of a bounce. The US Dollar is losing ground due to divergent central bank policies (we may continue to cut rates while others are holding steady or raising rates), which causes investors to chase higher risk-free returns in higher yielding countries. Additionally, a more accommodative and Doveish Fed may push inflation higher, causing a double whammy of loss of purchasing power on a global scale. Not to mention the growing US Debt burden.
3. Geopolitical Risk:
The world continues to simmer with multiple large-scale disruptions ever present. This includes anything from Venezuelan trajectory to Iran’s future, what’s happening in Gaza, Ukraine/Russia, and shifting alliances and global priorities amongst multiple countries. This has caused not only investor flight to haven assets, but also a flurry of central bank buying of Gold as a way to offset currency risk, and boost reserves.
Silver has been outperforming Gold as it not only hedges those 3 risks listed above, but has far more commercial demand, being used in industrial processes & coatings, chips, solar panels, and electrical contacts/conductive applications. This has caused some countries, such as China, to limit Silver exports as they reclassified them as a strategic material. Silver is mined globally, but Mexico, Peru and Chile are some of the top producers and strong allies. Added together, this builds a durable bull case for a continued metals rally with Silver to $110-$125 and Gold $6,000 in 2026. This aligns with Wells Fargo, JP Morgan and UBS’s outlook as well. We also feel it was appropriate for the metals to pull back sharply as they had moved parabolic and were beyond speculative, but post-selloff, a more attractive hedge against volatility. A warning, we do feel precious metals could have significantly above average vol this year- so diamond hands are needed!