Bull & Baird: Let's Talk Gold & Silver

Gold and Silver are on a historic run. From October of 2025 to today, Gold is up 30% and Silver is up 127%. What is happening? Did we discover that Silver cures cancer? 

Let’s talk about what’s happening and whether you should be taking action.

In my opinion, there are four reasons why Gold and Silver have moved higher sharply.

1. Worries about global debt and money printing. Gold and Silver have always been viewed as a place to park your money if you are concerned about inflation or dollar devaluation. That hasn’t changed—in fact it has ramped up as U.S. debt closes in on $40 trillion.
2. The role of the United States going forward. International concern has been rising about what role the U.S. will play in global affairs moving forward. Selling U.S. assets (like Treasury bonds) is one way international investors can signal their concern. They have to put the proceeds somewhere and many are choosing Gold and Silver.
3. Futures contracts and Silver supply. If I buy one futures contract on Silver, I can stand for delivery of 5,000 troy ounces of Silver. That’s 343 pounds of Silver in 13-inch bars. There are concerns about the supply of Silver that would be readily available to be delivered on outstanding contracts.
4. Meme-stock treatment. If you were to wander into Wall St. Bets on Reddit you would see them talking about Silver right now. Remember GameStop? Same thing. Unlike shares of a faltering business, Silver is a unique metal with underlying industrial uses. But we live in a world where anyone can trade anything from their phone and day traders are pushing Silver like it’s a meme stock. My friends at Strategas pointed out that 3.6mm call options on Silver traded on Jan 26. That is WAY outside normal levels.

Of all these reasons, I think #3 and #4 are the most important. If there were rising concerns about inflation and the dollar, we’d see it in the data and it’s just not there. Has the dollar index moved lower? Yes, but it’s still above levels seen in the late 2010s and early 2020s.

If you own Silver and Gold as part of a diversified portfolio, it may make sense to rebalance here. Rebalancing allows you to “sell high” when a portion of your portfolio makes a significant move.

If you don’t own these metals, I would caution you against allowing FOMO to overtake you.  Fear of missing out can cause people to make decisions they later regret. It’s ok to stick to your plan and your portfolio and not chase Silver up 127%.

Remember: play your game and no one else’s. There were plenty of stocks up more than Gold and Silver last year. You don’t have to own everything just because it’s in the news.

Past performance is not indicative of future results and diversification does not ensure a profit or protect against loss. All investments carry some level of risk, including loss of principal. An investment cannot be made directly in an index. Robert W. Baird & Co. Incorporated.