In our latest article from FundCalibre, Juliet Schooling Latter, research director at Chelsea Financial Services says that investors are not late to the party when it comes to gold and silver.
One of the last things we did at the back end of 2025 was speak to a number of multi-asset managers about their hopes and concerns for the year ahead. One of the primary outputs of those discussions was concerns about narrow market leadership from the leading tech/AI players and what theme (if any) could depose them in markets.
Gold and silver has to be the leading contender to do so at the moment. Both metals have had significant headlines in recent months as they continue to power to record highs. As of writing, gold stands over $5,000 an ounce and silver at $100*.
Is there a wall of worry with regards to both? Well, not exactly – the overarching view is we are in a new paradigm when it comes to evaluating these metals. One multi-asset manager was honest enough to admit they could make a case for gold standing at $2,000 to $8,000 over the next 12 months.
Gold has been a mainstay in Chelsea’s VT Managed fund range for a number of years and we currently see no reason for that to change given the rising geopolitical concerns and the de-rating of the US dollar. However, we have also been adding to silver in recent times. In simple terms, it is on a tear due to a number of factors, such as the supply and industrial deficits.
The World Silver Survey shows the global silver market running consecutive deficits in the past five years as demand has outpaced mine production and recycling – both of which tend to be quite inelastic.
A new report released recently by the Silver Institute argues that the industrial demand growth – photovoltaic, electronics, EVs and AI/data centres – is structural in nature and that it now accounts for 65% of annual demand and rising. There is a structural shortage, with demand rising 4% in 2024 to 680.5 million ounces, reaching a record high for the fourth consecutive year**.
You can see where there is caution given the rapid rise in value for both – but there is also a strong argument to suggest both can push on meaningfully from here. Jupiter Gold and Silver manager Ned Naylor-Leyland agrees, indicating that flows into ETFs show the likes of wealth managers, private clients and retail investors are yet to participate in the rally.
Ned’s fund is unique in that it invests in both physical gold and silver bullion, as well as gold and silver mining companies. The fund’s underlying philosophy is that gold is money: Ned believes gold and silver should be thought of as a currency, not a commodity.
When we last met Ned, he reminded us that a pound coin originally weighed one pound of sterling silver, giving the currency the name ‘pound sterling’. Today it is worth over £1,500!*
The fund combines physical gold and silver bullion with mining shares which offer deep relative value. The fund’s neutral position is 50:50 gold/silver. Ned will dynamically move the portfolio between bullion and miners, depending on his macroeconomic view and valuations. It currently has roughly 80% in equities and 18% in bullion***.
Ned essentially wants to de-risk the fund first before looking to accentuate returns. He does this in two ways: firstly he does not buy ETFs because he feels there is a lot of structural risk in gold and silver bullion markets, instead he buys bullion trusts in New York and Toronto held outside the banking system. The second is by limited exposure to miners in Australia and the Americas (tier 1-2 mining districts).
From the purest perspective, Ned has a 60-40% position in favour of silver in the portfolio at present. He says we are starting to see delivery failures, export restrictions in China and a spread in the price paid in Shanghai versus Western markets. He believes that despite the elevated prices we are going to see a scramble for silver very soon.
Investors are not late to the party
As mentioned, Ned says the lack of inflows into ETFs shows there is room to run for both physical gold and silver. He likens it to an ice cream sandwich (two wafers and the bit in the middle!). Both biscuits are doing well – one is leveraged capital, global hedge funds and commodity trading advisers being heavily involved and bidding for both metals (particularly silver); while the other biscuit is continued physical buying from Asia.
He says the much bigger part in the middle is long-only investment – which we’ve yet to see – adding that the key will be to watch total physical gold holdings in ETFs as a proxy for that market getting involved.
However, the gold and silver miners are where Ned is getting really excited. He says silver miners are still being priced in a world where physical silver traded between $5-30 an ounce not $90 – the mining world has to catch-up.
He says valuations look modest and it is incredible to see where they are. He says the free cash flow margin for gold miners has gone from 10 to 50% in the past seven years. To put that into context, 50% is roughly double the free cash flow for tech (widely regarded as the place to be for excess cash).
That typically leads to investors wanting to pay a higher multiple for a stock – but in the miners’ case they have actually got cheaper. In his view this is an exciting opportunity which will not last, given that we are seeing M&A, buybacks, dividend and special dividend payouts from these miners.
Essentially, these miners are offering equity investors everything they would want but are sitting at the bottom end of the market on a bear market valuation.
While history tells us these precious metals are expensive, it does not tell you how volatile the world is today and the unprecedented need for both metals in the future. The miners also look incredibly attractive as this demand grows and supply struggles to catch-up. There could be plenty left in this record-breaking rally.
*Source: bullionbypost.co.uk, 30 January 2026
**Source: Amati Global Investors
***Source: fund factsheet, 31 December 2025
Past performance is not a reliable guide to future returns. You may not get back the amount originally invested, and tax rules can change over time. Juliet’s views are her own and do not constitute financial advice.
Main image: cader_-QZTLHvvFqb4-unsplash
