Gold, silver no longer just safe havens? Wealth managers back a new allocation strategy

Gold and silver have generated impressive returns over the past few years, but wealth managers believe the investment case for precious metals extends well beyond the recent rally. According to Emkay Wealth Management, both metals are increasingly being viewed as strategic portfolio assets, supported by long-term structural trends rather than short-term speculative activity.

Despite periodic volatility triggered by geopolitical tensions, shifting expectations around US interest rates and fluctuations in the US dollar, the medium- to long-term outlook for gold and silver remains positive. The firm argues that the current bull market is fundamentally different from previous commodity cycles, with demand increasingly driven by central banks, institutional investors and long-term portfolio allocation decisions.

Wealth strategy

Traditionally, gold has been viewed as a safe-haven asset that performs well during periods of uncertainty. However, wealth managers now see a broader role for precious metals within diversified portfolios.

"Gold and silver are increasingly being viewed as strategic portfolio assets rather than short-term trading instruments. The current trend is driven more by structural allocation demand than speculative positioning," Emkay Wealth Management said.

The shift comes as investors seek protection against geopolitical risks, elevated global debt levels, inflation concerns and currency volatility. Since 2022, central banks worldwide have been accumulating gold at one of the fastest rates on record as part of efforts to diversify reserves away from the US dollar.

This trend, combined with rising institutional participation, has created a more durable demand base for precious metals than seen in previous rallies.

Why silver is gaining attention

While gold continues to be the preferred hedge against uncertainty, silver is emerging as an increasingly important component of long-term wealth strategies.

Unlike gold, silver benefits from both investment demand and industrial consumption. The metal is a critical input in solar panels, electric vehicles, electronics and clean-energy infrastructure projects.

As countries accelerate renewable energy deployment and manufacturing investments, demand for silver is expected to rise significantly over the coming decade. This dual demand profile has helped silver outperform many traditional asset classes during recent market cycles.

Recognising these trends, Emkay Wealth introduced silver fund allocations in February 2025, complementing its existing gold recommendations that have been maintained since FY23.

Structural drivers

Emkay Wealth believes several long-term factors continue to support precious metals.

These include expectations of future US Federal Reserve rate cuts, which could weaken the dollar and improve bullion's appeal. Continued central bank purchases since 2022 have also strengthened the long-term price floor for gold.

In addition, both gold and silver have witnessed major technical breakouts after nearly a decade of consolidation. Silver's prospects are further supported by rising industrial demand linked to clean energy and advanced manufacturing, while gold continues to benefit from concerns over US fiscal deficits and currency stability.

The firm noted that the current rally is largely allocation-driven rather than speculative, making it potentially more sustainable.

Allocation playbook

For investors, Emkay Wealth recommends treating gold and silver as core portfolio components rather than tactical trades.

Existing investors are advised to maintain allocations and use market corrections to add exposure. However, portfolios with gold exposure exceeding 25-30% may require rebalancing.

For new investors, the firm recommends a phased approach, with gold allocations ranging from 5-10% depending on risk appetite. Exposure can be gained through physical gold, Gold ETFs, silver funds, precious metals mutual funds and gold-linked investment products.

According to Vivek Choksey, Senior Vice President and Zonal Head, Ahmedabad, Emkay Wealth Management, precious metals deserve a permanent place in portfolios as global reserve diversification and industrial demand continue to strengthen the investment case.

The firm suggests allocation ranges of up to 5% for conservative investors, 10-15% for moderate investors and up to 20% or more on a tactical basis for aggressive investors. It also recommends a minimum investment horizon of three years to help investors navigate short-term volatility and optimise long-term returns.