Prices of gold and silver have seen sharp volatility over the past few weeks. Be it silver or gold, prices have seen wild swings between highs and lows.
Silver, being the more volatile metal, saw a sharper rise and a fall too
As markets brace for this shift, investors are questioning how much allocation they should give to these precious metals in their portfolios or whether they should exit altogether.
Emkay Wealth says that gold and silver have entered a 3-5 year ‘bull phase’ backed by a combination of macroeconomic trends, structural demand and long-term portfolio reallocation
How much should investors allocate to precious metals?
Emkay Wealth Management expects significant upside in the prices of precious metals and recommends that existing investors continue holding gold and silver as part of their diversified portfolios.
For existing investors, the firm suggests that incremental additions of gold and silver should be made gradually and preferably during periods of price correction.
“Portfolios with relatively high exposure, particularly where gold and silver together account for more than 25 to 30 percent of assets, should be reviewed with a professional advisor to assess profit booking while retaining strategic allocations.” Emkay said in its report
For new investors, Emkay advises a disciplined approach following the strong rally in precious metals. “ An allocation of around 5 to 10 percent of the overall portfolio may be more appropriate,” Emkay added.
They further add that investors should invest gradually over time to help and in multiple trading instruments to limit the impact of price swings. “Investments are best staggered over time to mitigate volatility, with options including physical gold, gold and silver ETFs, gold mutual funds and precious metal-linked investment products.
Emkay Wealth sees precious metals moving beyond short-term trades
According to Emkay the ongoing price upswing for gold and silver reflects a departure from the earlier cycles of short-term trading.
“The current phase is being powered by sustained asset allocation into gold and silver as part of diversified portfolios, reflecting a shift in investor behaviour amid heightened global uncertainty.” the firm said in its report.
The firm holds a positive stance on gold holdings and first recommended gold funds in FY23. While, silver was recommended by Emkay in early 2025, both as a precious metal and for its growing industrial usage.
“The current rally in gold and silver is not being driven by speculation, but by a structural shift in how investors globally are allocating capital,” said Dr. Joseph Thomas, Head of Research, Emkay Wealth Management said.
Thomas added, “With central banks continuing to accumulate gold, interest rate cycles turning supportive, and silver benefiting from rising industrial demand, precious metals are increasingly being viewed as core portfolio assets rather than tactical hedges. “
He highlighted that short-term volatility is inevitable, but the medium- to long-term case for maintaining measured exposure to gold and silver remains strong.
Emkay says Gold and Silver emerged from consolidation phase
From a market-cycle perspective, Emkay said that both gold and silver have emerged from their decade-long consolidation phase and entered a ‘structural bull market around a year ago’.
Emkay added that investors who allocated to gold over the past year have seen sharper gains with much enhanced gains for especially Indian investors.
“Investors who allocated to gold over the past 12 to 18 months have already benefited from strong gains, which have been further enhanced for Indian investors by the depreciation of the rupee against the US dollar.” the firm said.
Emkay says industrial demand continues to support Silver
Emkay noted that, in comparison to its previous performance, this time the price uptrend for silver is likely to sustain due to the white metal’s increasing industrial usage.
“Silver’s performance has been particularly noteworthy due to the expansion of industrial demand across sectors such as renewable energy, electronics and advanced manufacturing.” Emkay said.
It noted that the increased industrial usage provides greater sustainability for silver prices.“This differentiates the current rally from earlier cycles and lends greater sustainability to price movements.”Emkay added.
The firm said that periodic profit-taking may occur after sharp rallies, but the broader trend remains well supported by structural demand.
Where are the prices headed?
Emkay says that how much further these metals’ gains extend depends on global economic and policy developments.
“A moderation in global growth combined with accommodative monetary policy would continue to support gold and silver prices.” Emkay said in its report.
The firm added the momentum for price fluctuations may slow down over a stronger-than-expected recovery in the US economy or sustained dollar strength.
As for Indian investors, Emkay says that the rupee remains a key monitorable. “For Indian investors, currency movements remain a key variable, as any sharp appreciation in the rupee could moderate returns despite stable global prices”.
Conclusion
Overall, Emkay remains bullish on gold and silver, citing strong underlying fundamentals—like persistent central bank purchases, strong demand, and global uncertainties—continue to support their prices.
The firm added that gold and silver are bound to short-term price swings however the overall outlook remains positive.
“While short-term volatility is inevitable, the medium- to long-term outlook for precious metals remains constructive as investors seek diversification, stability and protection against macroeconomic and currency uncertainty.” Emkay said.
Disclaimer: The views and recommendations made in the article are those of the brokerage companies, and not of Financial Express.com. We advise the audience to consult with certified experts before making any investment decisions.