By Debbie Carlson

Precious metals' red-hot rally has cooled somewhat lately, but prices remain elevated after last year's run-up. That leaves investors who have missed out with a dilemma: Is it too late to buy, or is some exposure worth considering?

Market watchers have a positive outlook for precious metals -- gold, silver, platinum and palladium -- as a weaker U.S. dollar, supply constraints, geopolitical uncertainty, and both investor and industrial demand are likely to underpin prices over the long term. But they're wary in the short term after a run in 2025 that has pushed the group to their highest levels in decades.

"There are strategic reasons for holding these metals, but commodities are volatile and they will dip," says Kathy Kriskey, head of alternatives ETF strategy at Invesco.

What's more, investors shouldn't expect the four metals to always move in tandem as they have over the past year or so. They have distinct supply-and-demand fundamentals and each has a different role in a portfolio. Gold has the broadest investor base and tends to be the most stable. Silver, platinum and palladium trade in much smaller markets, making their prices more prone to sharp swings.

Investors in precious metals need to be relatively attentive, as commodities require more attention than what typical buy-and-hold stock and bond investors may be accustomed to. Here are some insights from experts about what to look for.

Precious-metals basics

Gold's rally began in 2022, underpinned by several factors, including geopolitical concerns with the start of the Russia-Ukraine war, rising inflation, increased central-bank buying and a weakening U.S. dollar. Those conditions among others cater to gold's traditional status as a store of wealth, safe-haven investment and alternative currency. On a three-year annualized basis, gold is up 38%.

Silver plays a dual role as it can be a monetary metal that follows the same drivers as gold, but nearly 60% of silver's demand comes from industrial use, according to the Silver Institute, and those uses often drive its performance. Silver is up 168.4% over the past 12 months.

Platinum and palladium are primarily used in industrial production. Some platinum is used in jewelry, but almost half of platinum's demand, and nearly 85% of palladium's use, is for vehicle catalysts to scrub emissions. Over the past 12 months, platinum is up 129% and palladium is up 72.6%.

As for the forces driving the metals over the long term, market professionals say gold prices may weaken if central banks stop buying the metal for their currency reserves, geopolitical tensions ease or if the dollar rallies. Prices for silver, platinum and palladium, meanwhile, could falter if global growth slows or there is a recession in a major economy.

Near term, however, precious metals could come under pressure if industrial demand falters because of their elevated prices. Take silver, for instance. Before its run-up, silver was 5% of the cost of a solar panel and now it's 30%, Kriskey says. If prices remain elevated, she says it could spur manufacturers to substitute cheaper metals, which might reduce silver demand and weigh on prices.

After last year's rallies, several bank and commodity specialist firms' 2026 price outlooks suggest metals will hold recent gains with modest upside potential. The most optimistic forecasts suggest that gold could trade as high as $6,300 an ounce, but the full-year average price estimate between analysts range from around $4,400 and $4,800.

Analysts' estimates for platinum's average price range between $2,100 and $2,450 an ounce, with palladium between $1,600 and $1,725 an ounce. They are most cautious on silver's outlook, given its tendency for wide price swings, with average price forecasts ranging between $50 to $70. Financial advisers say these wide ranges underscore the metals' volatility and why investors shouldn't chase prices.

Allocating to metals

Do you need precious metals in your portfolio? Matthew McKay, portfolio manager at Briaud Financial Advisors, says the answer lies in the makeup of an investor's overall portfolio and their market outlook.

If an investor has no alternative assets, precious metals are uncorrelated with stocks and bonds, so they can offer diversification to lower overall portfolio risk, he says. Investors should also weigh their views on economic trends such as inflation or geopolitical risks, and whether they can handle the volatility that comes with commodities.

Investors who want to own precious metals should limit their holdings to 5% to 10% of their total portfolio allocation, financial advisers say. Investors who have held metals since before 2025's rally should consider rebalancing to reduce stakes that may have grown beyond those levels, they add.

Financial pros also advocate that novice investors use dollar-cost averaging, where they buy a certain dollar amount at set intervals, rather than going in all at once.

There are many ways to gain exposure to precious metals, from physical coins and bars to exchange-traded funds and mining-company stocks.

Investors who buy physical coins and bars should consider secure storage and will pay dealers a small percentage above or below spot prices when they buy and a sell, which adds to the cost.

For investors who don't want the hassle of physical ownership, ETFs are cheap and easy to buy and sell in a brokerage account. Some hold physical gold and some track futures prices, and there can be a difference in return and tax consequences.

Debbie Carlson is a writer in Chicago. She can be reached at reports@wsj.com.

(END) Dow Jones Newswires

February 10, 2026 12:00 ET (17:00 GMT)

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