Gold, silver at high: Invest at all-time highs or wait for a dip? Expert decodes what history and data really suggest

Gold and silver surged to fresh record highs on Tuesday, underscoring the strength of the ongoing rally in precious metals as investors sought safety amid a weaker dollar and persistent geopolitical uncertainty. Spot gold rose 0.9% to $4,486.34 per ounce by 1248 GMT, after touching an all-time high of $4,497.55 earlier in the session, just shy of the psychologically important $4,500 mark. U.S. gold futures for February delivery climbed 1.1% to $4,518.90 per ounce.

Silver outperformed, extending its sharp rally to uncharted territory. Spot silver surged 2.2% to a record $70.61 per ounce, crossing the $70 mark for the first time. The white metal is now up about 143% year-to-date, driven by persistent global supply deficits, robust industrial demand, and strong investment inflows.

Commenting on investor behaviour at record highs, Alok Jain, founder of Weekend Investing, said all-time highs often trigger discomfort rather than confidence among investors. “Most people want to exit when an asset is near an all-time high, and nobody wants to enter because the conventional wisdom is that prices are stretched and risky,” he said. According to Jain, this instinct is often misplaced.

He explained that entering near an all-time high typically means following price behaviour that signals strength. “When an asset breaks past previous highs, there is no overhead resistance left. If there is a reason for more money to flow in, it can continue making new highs for a long time. That momentum effect is very real,” Jain said, adding that long consolidation phases often precede powerful breakouts.

Jain cited historical data to illustrate the point. Over the past 25 years, investing at all-time highs in the equity market has still produced favourable outcomes. One-year returns after investing at a peak were positive about 77% of the time, with an average return of around 13%, close to the long-term average of the Nifty. Over a three-year period, the probability of positive returns rises to nearly 90%, while over five years, returns have been positive 100% of the time.

Even extreme stress-test scenarios support the argument, he noted. Investors who bought at the peak of the dot-com bubble in February 2000 still earned roughly 12.5% annualised returns over 25 years. Those who invested just before the 2008 global financial crisis or the January 2020 COVID crash also ended up with solid long-term returns despite sharp interim declines.

Jain cautioned that fear at highs is largely psychological. “Anything going up should not create fear. The real risk is buying something that keeps going down,” he said, adding that disciplined strategies, staggered investments rather than lump sums, and proper asset allocation can help investors navigate volatility.

Why are gold, silver surging again

Market participants point to a combination of macro and structural factors behind the rally. Ongoing geopolitical tensions, including strains between the US and Venezuela, have reinforced demand for safe-haven assets. Expectations of further interest rate cuts by the US Federal Reserve and weakness in the dollar index have also supported precious metals. In silver’s case, tight supply conditions and rising demand from sectors such as clean energy, electric vehicles, defence, and data centres have amplified the move.

With gold near $4,500 and silver at record highs, markets may continue to test investor resolve. But history, analysts say, suggests that for long-term investors, today’s peaks could simply be another starting point.