What to Know About the Metals Market – A Guide to Investing in Precious Metals

A View from Four Blocks Away

On the morning of September 11, 2001, I was working on the floor of the New York Stock Exchange — four blocks from the World Trade Center. It was a clear, stunning September morning in a city that felt invincible.

In the days and weeks that followed, as the markets reopened and the world tried to make sense of what had happened, I found myself thinking differently about risk. Not the usual risks of earnings misses or interest rate changes — but the kind of shock that reminds you the systems we trust with our savings are ultimately built on human confidence.

That experience led me to study precious metals more seriously as an investable asset class. Not out of fear, but from a practical question: what holds its ground when everything else is shaking?

What holds its ground when everything else is shaking?

I’ll be honest: gold has always been a reluctant asset for me. The Parable of the Talents comes to mind — metal buried in the ground earns nothing. It pays no interest or dividends. It doesn’t build factories or fund innovation. Every dollar in a gold bar is a dollar not compounding elsewhere.

And yet, over thousands of years, through the collapse of empires and the debasement of currencies, gold has served as a store of value. Not always the best investment. Not a growth engine. But reliable when other systems falter. That difference matters enormously.

What follows is what I have learned over more than two decades of watching markets and advising families on wealth that needs to survive generations.

Gold as a Hedge: Its Role in a Modern Portfolio

Gold has served as a store of value for thousands of years. Investors often turn to it during periods of inflation, currency debasement, or geopolitical uncertainty — conditions that feel particularly familiar today.

Safe-Haven Status

When markets face trade tensions, geopolitical conflict, or policy uncertainty, demand for gold tends to rise. Unlike stocks or bonds, gold is a physical, finite asset with no counterparty risk and no dependency on any single government’s decisions. Spot gold prices surged past $4,600 per ounce in April 2026, reflecting sustained institutional and retail demand across a period of exceptional global turbulence.

Low Correlation with Traditional Assets

Gold often moves independently of stocks and bonds. When equities decline, gold can hold steady or rise, helping reduce overall portfolio volatility. This diversification benefit makes it a practical holding for families focused on long-term capital preservation — and a critical component in any serious discussion of alternative assets for high-net-worth investors.

What the Central Banks Are Telling Us

Central banks worldwide have been purchasing gold at record levels while quietly reducing their relative exposure to U.S. Treasuries. These are the institutions tasked with protecting national financial stability. When they move in one direction for three consecutive years, it warrants attention.

The Central Bank Buying Surge

From 2022 through 2024, global central banks purchased more than 3,220 tonnes of gold — more than double the pace of the prior decade, which averaged roughly 473 tonnes per year. In 2024, net purchases reached 1,044.6 tonnes, the third-largest annual total on record. Buying moderated in 2025 to approximately 863 tonnes, but remained nearly twice the long-term historical average.

The World Gold Council’s 2025 Central Bank Gold Survey showed 95% of respondents expecting global official reserves to increase over the next twelve months — the highest reading in the survey’s history. A record 43% planned to add to their own holdings within the year. Leading buyers included Poland, Kazakhstan, Brazil, Azerbaijan, and China.

To put the shift in context with hard numbers:

• Annual average central bank gold purchases, 2010–2021: 473 tonnes
• Annual average central bank gold purchases, 2022–2025: approximately 990 tonnes
• Gold’s share of global central bank reserves, circa 2015: 9%
• Gold’s share of global central bank reserves, 2025: approximately 24%

Basel III and Gold’s Regulatory Standing

A note worth getting exactly right, because this topic circulates with considerable misinformation online: allocated physical gold has carried a 0% risk weighting under Basel capital rules since Basel I in 1988 — the same treatment as cash. Under the Basel III framework, effective April 1, 2019, gold was formally elevated from its prior Tier 3 classification — where bank holdings were discounted by 50% — to full Tier 1 status at 100% of market value. That is a significant regulatory shift that reduced the penalty for banks holding physical gold on their balance sheets and has contributed meaningfully to the institutional buying trend that followed.

The LBMA and World Gold Council continue to advocate for gold to receive additional recognition as a Level 1 High-Quality Liquid Asset — a separate liquidity designation — and the data supporting that case is strong. Regardless of where that debate lands, the regulatory architecture surrounding gold has never been more favorable.

The Quiet Retreat from U.S. Treasuries

Meanwhile, the share of publicly held U.S. debt owned by foreign investors has declined from nearly 50% in the early 2010s to approximately 30% as of late 2024. China’s holdings have fallen in both nominal and proportional terms. Foreign central banks held roughly $48 billion less in U.S. Treasury custody at the New York Federal Reserve by mid-2025 than at the start of the year — an acceleration that coincided with April tariff volatility and Moody’s removal of the United States’ last prime credit rating in May 2025.

Most telling of all: gold now accounts for approximately 24% of global central bank reserves, surpassing U.S. Treasuries at roughly 21% — the first time gold has held that distinction since the mid-1990s. In 2015, Treasuries represented 33% of reserves and gold just 9%. That reversal has been dramatic, sustained, and driven by the world’s most analytically sophisticated institutional buyers.

Gold now accounts for approximately 24% of global central bank reserves, surpassing U.S. Treasuries — for the first time since the mid-1990s.

At The Wealth Stewards, we include real assets within our clients’ alternative investment sleeve. We view gold not as a speculative trade, but as an insurance policy against sustained fiscal and monetary recklessness by governments and the long-term erosion of fiat currencies. The institutions managing the world’s sovereign balance sheets appear to agree.

The Complete Picture: Pros and Cons of Precious Metals

The Case for Gold

• Physical gold carries no counterparty risk — an ounce of gold is an ounce of gold, regardless of what any institution does or fails to do
• Highly liquid in global markets and has historically protected purchasing power during currency debasement
• Low correlation to equities and bonds provides genuine diversification, particularly during tail-risk scenarios
• Increasingly recognized by the world’s most sophisticated reserve managers as a core strategic asset

The Case Against Gold

• Generates no income — no interest, no dividends, no earnings growth
• Over long periods, equities have significantly outperformed gold as a total return asset
• Storage, insurance, and transaction costs reduce net returns on physical holdings
• Gold works best as portfolio insurance, not a primary growth engine
• Most advisors suggest limiting exposure in a well-constructed portfolio

Silver: The Volatile Sibling

Silver shares gold’s monetary history but introduces a layer of industrial complexity that makes it a fundamentally different animal. Solar panels, electric vehicles, and advanced electronics have created genuine structural demand. But that same industrial sensitivity means silver is subject to swings that can unnerve even experienced investors.

Silver began 2025 near $29 per ounce, then embarked on one of its strongest runs in decades. It shattered its prior all-time high of $49.95 in October 2025 and continued climbing into triple-digit territory. On January 29, 2026, silver set a new all-time high of $121.64 per ounce, driven by a convergence of supply deficits, industrial demand from solar and EV sectors, geopolitical uncertainty, and institutional safe-haven flows. Within weeks, prices collapsed roughly 48% — triggered by CME margin requirement hikes that forced leveraged liquidations, Fed hawkishness on rate cuts, and natural profit-taking after a 147% gain in 2025. As of April 2026, silver trades near $75–$80 per ounce, still up dramatically year-over-year.

These are not assets for the faint of heart. Silver’s behavior over the past twelve months alone should tell you everything you need to know about position sizing and discipline.

A modest allocation may suit investors with high conviction and genuine tolerance for extreme short-term volatility. For most families building durable, multigenerational wealth, gold alone provides cleaner and less treacherous precious-metals exposure.

How to Invest: Physical Gold vs. Digital Instruments

Physical Bullion (Coins and Bars)

You hold the actual metal with no intermediary. Storage and security add costs and complexity, and physical gold carries different tax treatment in some cases. For clients who prioritize maximum counterparty independence, this is the purest expression of the thesis.

Gold ETFs and Mutual Funds

These offer convenient, cost-efficient exposure without storage considerations and trade like equity securities. They have seen strong institutional inflows in recent years and are appropriate for most portfolio applications. For investors searching how to invest in gold without physical storage, ETFs are the most practical starting point.

Mining Stocks and Futures

More aggressive instruments that layer in additional risks: management quality, operational leverage, and commodity-price amplification in both directions. Generally not appropriate for long-term, goal-oriented family portfolios.

Common Pitfalls: What the Family Steward Should Avoid

• Panic buying during headline crises, which typically means buying near peaks after institutional money has already moved
• High-pressure sales of rare or collectible coins with large dealer markups — the numismatic premium evaporates when you try to sell
• Over-allocation beyond a modest insurance-level position
• Conflating silver’s industrial story with gold’s monetary story — they require different frameworks and different risk tolerances

Is Gold Right for Your Financial Trajectory?

There is no one-size-fits-all answer. The right allocation to precious metals depends on your time horizon, income needs, risk tolerance, and overall plan.

What stands out — and what I find genuinely hard to dismiss — is that the world’s most sophisticated reserve managers are making a sustained, accelerating bet on gold even at elevated prices. They are not doing this for sentiment. They are doing it because the fiscal trajectory in most major economies is unsustainable, fiat currencies face structural pressure, and gold has held value through every monetary regime collapse in recorded history.

Gold remains a reluctant asset for me. It earns nothing. It creates nothing. But sometimes the wisest insurance is the one you hope you never need.

A modest allocation to gold is not a bet against the economy. It is a recognition that no monetary system has lasted forever — and that the families who understood that have fared better than those who didn’t.

A fiduciary advisor can help you evaluate whether and how gold fits your specific situation — without the conflicts of interest common in parts of the precious metals industry. We would welcome the conversation.

Ready to think through your allocation?

Schedule a discovery meeting with our team or explore more at www.tws.finance/contact/

Sources

• World Gold Council — Central Bank Gold Survey 2025; Gold Demand Trends 2024 Full Year; Official Sector Statistics
• London Bullion Market Association — Gold and HQLA: Correcting Misleading Online Information (2025); Gold’s Treatment Under Basel III
• Bank for International Settlements — Basel Capital Accords (Basel I, 1988; Basel III, effective April 1, 2019)
• Congressional Research Service — Foreign Holdings of Federal Debt (Updated March 2026)
• Bipartisan Policy Center — Foreign Investors Hold a Shrinking Share of U.S. Debt (2025)
• Global Markets Investor — Foreign Central Banks Dump U.S. Treasuries (April 2025)
• VanEck — Gold Market Commentary 2025–2026
• Silver Institute / Metals Focus — Silver Market Review 2025; Global Supply Deficit Projections 2026
• Axi / GoldSilver.com — Silver Price Forecast 2026–2027
• LiteFinance — Silver All-Time High $121.64, January 29, 2026