Should one invest in Precious Metals at these elevated Levels?

Should You Invest in Precious Metals Now After Missing the Rally?

Lately, I have fielded this question daily from investors and MFDs: "We've missed the precious metals surge—is it too late to buy?"

It is surprising how many overlooked this once-in-a-generation rally, where gold and silver doubled or tripled in value over the past two years. Blame goes to equity obsession for long-term wealth and business channels fixated on India's growth story, ignoring the seismic shifts brewing elsewhere.

That said, let me explain why my Advisor Hat directed my Investor Hat to precious metals. In August 2024, I spotted equity markets peaking in expensive territory (confirmed by the September top). I wrote "Time to Look Beyond Equities," advocating lightening overvalued small- and mid-caps and reallocating to gold and silver—assets then flying under the radar.

Post-COVID dynamics in global economies sealed it. Key drivers:

• US debt exploding past $35 trillion.
• De-dollarization accelerating after Russian asset freezes in the Ukraine war.
• Persistent inflation from dollar overprinting.
• Escalating geopolitical tensions worldwide.
• Silver's supply crunch amid surging demand.
• Widening US fiscal deficits and a softening dollar.
• Elevated S&P-to-gold ratio signalling overpriced equities.
• Gold-to-silver ratio at 87:1, highlighting silver's relative undervaluation.

This was not chasing past returns or FOMO—it was deliberate asset rotation amid equity overvaluation, tracking institutional flows, and betting on future macro tailwinds.

I recommended (Advisor Hat) and invested (Investor Hat) progressively through 2025, scaling up gold/silver while trimming equities. When the gold-to-silver ratio dipped below 80 in September 2025 (silver at $50/oz), I went overweight silver.

My average costs?

Gold at $2,700–$3,000/oz; silver at $35–$40/oz. At today's levels—gold ~$5,200/oz, silver ~$111/oz—further buys barely dent my averages. I see this as the century's great financial reset: eroding faith in the US dollar as reserve currency, driving flows to hard assets—gold for store-of-value, silver amid industrial/investor shortages.

Bottom line on investing now:

FOMO-driven? Absolutely not:

Sit it out and wait for a cooldown. Past performance is no guarantee of future gains, and jumping in now just because you have missed the rally screams emotional decision-making. First, assess the true role of precious metals in your portfolio: they act as a hedge against inflation, currency debasement, and equity downturns, not as a quick-profit vehicle. Study the macro drivers—like US debt spirals, de-dollarization trends, and geopolitical risks—before acting. Base your choice on conviction in these fundamentals, not regret or hype from social media or business channels.

Key Risks for New Investors

Investing without grasping these dynamics risks buying at peak levels, with heightened volatility ahead. Yesterday's gold price swings—from $5,500/oz down to $5,100/oz before closing at $5,300/oz—mirrored similar turbulence in silver.These conditions often prompt beginners to amplify downturns via panic selling, missing prime "buy-the-dip" chances. Treat corrections as strategic entry points by focusing on fundamentals over short-term noise. Stay disciplined to navigate volatility effectively.

Strong conviction in the macro thesis?

Go ahead and build exposure strategically. Do you truly believe we are in the midst of a profound global financial reset—with the dollar losing its unchallenged reserve status, fiat currencies under pressure, and hard assets like gold and silver gaining as safe havens? If yes, start small via disciplined methods like daily or weekly STP/SIP into gold/silver ETFs, through Mutual Fund ETF FoF, or physical allocations (aim for 10-20% portfolio weight depending on your risk profile). Expect sharp volatility—pullbacks of 10-20% are normal in these cycles—but treat this as a long-haul play (5-10+ years). Use dips to average in, monitor ratios like gold-to-silver for relative value, and pair with diversified equities for balance.

DISCLAIMER:

These are personal views of the author for information purposes only. These should not be construed as investment advice.