BFS Hits the Airwaves with Take on Volatility in Precious Metals

With the recent price of gold hitting an all-time high of more than $5,100 per ounce in January followed by a jarring speed bump, we had the opportunity to address the volatility in precious metals with local media. Gold had a historic runup in 2025, climbing over 50% before suffering a significant plunge. Silver and copper have had parallel rides.

The conversation between Rosa Y. C. Chen, Director of Research, and NBC Connecticut focused on the growing interest in silver and gold as investors look for safe havens against geopolitical risks and inflation, particularly with the current administration advocating for a weaker dollar and lower interest rates. Her interview with Connecticut Public Radio explored the recent volatility in gold, silver, and other precious metals, and what it means for everyday investors as well as Connecticut taxpayers.

Even though precious metals rebounded after the sharp drop, both new and seasoned investors are asking for more advice amidst heightened volatility. Here are three main points she shared about the current environment.

Shifting interest rates and geopolitical tensions are a large part of the factors currently driving demand for gold and other precious metals to protect from runaway inflation. Any economic uncertainty is a normal part of the cycle. Following a well-thought out investment game plan focused on the long term is the best defense against uncertainty and volatility.

Historically precious metals, particularly gold, have served as good protection against inflation and geopolitical risk. As a result, they can benefit a diversified portfolio in conjunction with other asset classes. Precious metals, as we have seen, can be volatile and, in the short term, may not be a guaranteed safe haven.

Investment portfolios that diversify across different asset classes that are not entirely correlated with each other can lower volatility and provide strong risk adjusted returns; the vast majority of pensions are designed to optimize long term risk adjusted returns. In addition, gold is only about 3% of global financial assets that include bonds, stocks and private alternative investments. Therefore gold volatility should not impact your retirement income from pensions.

Gold has a long history as a currency that withstands the ravages of inflation over long periods of time. Silver and copper, at times, have been used as currency but lacks the same track record. Copper is inefficient for currency uses given the low price per ton. Silver, the poor man’s gold, is both a precious and industrial metal. Typically silver loosely follows the price of gold, but with more volatility. It is not for the conservative investor.

If you’re wondering about the speed bump, investments often have a period of consolidation or digesting the move. The bottom line, if you’re trying to protect future purchasing power, having something in your portfolio to hedge inflation is not a bad idea.

You can find the coverage from NBC and public radio through the links below.

• NBC Connecticut
• Connecticut Public Radio