Striking a balance: How gold, silver fit into the 2026 asset mix

Amid a backdrop of global macroeconomic shifts, investors are re-evaluating traditional portfolio strategies to incorporate assets that offer both resilience and growth potential. Precious metals, particularly gold and silver, have resurfaced as critical components in this recalibration, driven by evolving market dynamics, industrial tailwinds, and sustained institutional demand.

According to a recent commodities outlook by PL Capital, 2026 is poised to witness a renewed focus on these metals, not merely as defensive hedges but as active building blocks in strategic asset allocation.

With gold offering stability against inflation and currency volatility, and silver riding on secular growth themes like clean energy and technology, PL Capital underscores a dual-metal strategy that blends safety with upside potential.

The report highlights how investors, ranging from central banks to retail participants, are increasingly turning to structured exposures such as ETFs and sovereign instruments to integrate these metals into core portfolios.

Here’s what the report says:

Gold: Anchor of stability and macro hedge

PL Capital describes gold as a “macroeconomic hedge and portfolio diversifier,” underscoring its relevance in portfolios seeking downside protection amid geopolitical uncertainty, elevated inflation prints, and softening real interest rates.

As of Q4CY25, gold has delivered robust returns and continues to see sustained demand from central banks and institutional investors. The firm notes that the ongoing global accumulation of gold, especially by emerging market central banks, reflects its perceived status as a store of value amid shifting currency dynamics.Within the retail investment space, gold ETFs and sovereign gold bonds are highlighted as preferred vehicles for exposure. The firm notes their liquidity, tax efficiency, and transparent pricing as key factors supporting broader adoption in asset allocation strategies.

“Gold remains core to the strategic allocation framework,” PL Capital notes, particularly in multi-asset portfolios balancing equities, debt, and commodities.

Silver: A tactical allocation with structural demand tailwinds

While gold serves as the foundation for stability, PL Capital points to silver as a “higher-beta tactical allocation” with growing significance in diversified portfolios.

According to the note, silver is witnessing tailwinds from its industrial demand profile, particularly in sectors such as clean energy (solar PV), electric vehicles, semiconductors, and AI-driven technologies.

The firm cites silver’s dual role—part monetary, part industrial—as an advantage in environments where growth is driven by both macro hedging and sector-specific innovation. “With silver being declared a critical mineral in the United States and chronic supply deficits emerging, the long-term investment case remains robust,” the note states.

Although PL Capital cautions about potential near-term volatility, it emphasizes that silver’s underlying demand momentum is likely to stay intact through CY26, making it a viable thematic addition to commodities-focused portfolios.

Allocation strategy for investors

The report notes a growing trend among investors to play the precious metals theme through exchange-traded funds (ETFs), citing benefits such as ease of access, liquidity, and minimal tracking error. PL Capital highlights that ETFs offer a disciplined route to gain exposure without the storage risks associated with physical bullion.

“Institutional and retail investors alike are increasingly turning to ETFs to maintain diversified exposure across gold and silver without taking directional speculative bets,” the report adds.

The firm also points out that the combined use of gold and silver ETFs can provide a barbell approach, where gold ensures risk mitigation and silver contributes to alpha generation.

According to PL Capital, such structured allocations are gaining relevance in wealth advisory portfolios, multi-asset funds, and thematic investment products.

Outlook for 2026

While PL Capital refrains from giving explicit price targets in this section, the firm maintains that structural factors, policy shifts, and asset rotation trends will continue to keep investor interest elevated in both gold and silver.

As central banks, institutional allocators, and high-net-worth individuals adjust their strategies, precious metals are expected to retain a central position in portfolio diversification themes in the upcoming financial year.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)