WP talks to Global X research analyst Brooke Thackray
Precious metals is a relatively wide asset class, but gold is generally the headline grabber, while silver gets less attention. But there are good reasons why both should be considered in portfolio construction.
WP has been speaking with Brooke Thackray, research analyst at Global X to understand more about how gold and silver provide different investment opportunities and why now is a good time to be thinking about allocations in light of some challenging equity market conditions.
First, let’s talk gold. While bullion frequently gains when the market gets jittery – and there’s been plenty of reasons for that in recent years – it also tends to ease somewhat when equities rally. But gold prices have been trending higher in recent years which Thackray acknowledges has been driven by central bank buying.
“Central banks, after being net sellers of gold for many years became net buyers in 2010 and have been net buyers since,” he says. “Central bank buying increased sharply in 2022 when the US kicked Russia out of the SWIFT payment system. Countries around the world, especially in the emerging markets saw this as a warning that one day they could suffer the same fate and started to divert some of their holdings into gold. Central bank buying has remained strong since 2022 and shows no signs of letting up in 2025, helping to support a higher gold price.”
With trade tensions having dominated the first half of 2025, gold has gained and exports of the metal from the UK to New York aimed to avoid potential tariffs on gold imports to the US. This boosted gold prices and, even when tariffs on gold were largely ruled out, prices remained elevated due to the wider tariff issues.
“On a day-to-day basis, as the tariff situation waxes and wanes, the price of gold tends to respond,” Thackray says. “If the tariff situation were to be totally solved and free trade was the norm, which has a low probability of happening, gold may decrease a bit, but the tariff resolution will not be the catalyst for gold to move substantially lower. There are other major factors driving the price of gold.”
And how about silver? How does it shape up to gold from an investment point of view?
“Silver is both an industrial and precious metal,” explains Thackray. “The world needs more silver to ‘green’ the electrical network as it is used in both solar panels and EV cars and many other electrical components. There is a shortage of silver and yet silver has not managed to appreciate as much as gold. The main reason for this is that central banks have been buying gold and not silver.”
However, the analysts expects that silver will probably increase its performance relative to gold when commodities in general start to improve their performance.
As we know, gold is a go-to haven during volatile markets, but does silver offer similar safety? And how does Thackray see investor behaviour relating to silver?
“Silver tends to be more volatile than gold,” he says. “When gold moves higher, silver tends to follow. Silver tends to outperform gold when the move is large and the metals and mining sector is outperforming. The reverse situation also tends to unfold. In a typical portfolio investor would have a smaller position in silver compared to gold due to its higher volatility.”
He adds that a lot of investors follow the gold-to-silver ratio.
“Using the London PM price for both gold and silver, gold has on average traded at 68 times the value of silver since 1984. Currently, the ratio is at 100 times. The belief by some investors is that the gold-silver-ratio will move back to its historic average. Although the gold-to-silver ratio could move down over time, it does not necessarily have to move to its long-term average.”
The elephant in the room is perhaps whether gold is still the haven it once was and whether it is still delivering the same for investors in times of geopolitical turmoil, inflation, and monetary instability.
“In more recent years, gold has not been a good geopolitical safe haven,” Thackray notes. “When geopolitical tensions have flared up, gold has generally been unresponsive. To the degree that geopolitical tensions affect monetary instability, gold is reactive. The current tariff situation is a good example as it has affected monetary stability with money leaving the US and being re-domiciled.”
“Long-term yields for many countries, including the U.S. Germany, UK, Japan and Canada, have been heading higher,” he continues. “Investors are getting concerned that governments are borrowing too much money without regard and are demanding higher yields. The current monetary instability has made gold more attractive and has helped to push its price higher, despite rising yields.
There has been lower interest in buying gold among both retail and institutional investors in recent years, but Thackray says there could be a resurgence.
“If we look at the amount of gold ounces held in the SPDR Gold Trust (GLD), the biggest gold ETF in North America, it currently stands at 29.7 million ounces, compared to a peak of 41.1 million in 2020 (Bloomberg),” he says. “What this means is that gold investors have been net sellers of gold over the last two to three years, despite gold rising in price. This is good news for current gold investors because when the narrative changes and investors start to become interested in gold, this should help to move the price of gold higher.”
How much of gold’s current value is driven by fundamental demand versus macroeconomic sentiment and speculation?
“Gold jewelry accounts for approximately 50% of the gold mined each year,” says Thackray. “This figure changes from year to year, but it is not the main driver of gold’s price. Macroeconomic factors are having a large impact on the stock and bond markets and the gold market and are the main drivers of the gold price. This trend will probably continue. It has been interesting to note that gold has performed in 2025 despite rising long-term bond yields in the US and other countries. This has shown the price resilience of gold as it typically moves lower with rising bond yields.”
With inflation now appearing more stable, how does Thackray expect that to impact gold and silver prices over the next 6–12 months, given that central banks are still buying?
“Institutions and individuals are looking for investment alternatives to government bonds. Although gold does not pay a yield, it is being seen as a good diversifier in these uncertain times,” he says. “With governments continuing to increase their borrowing and interest rates increasing, governments are going to have to borrow even more money. Although inflation will probably continue to decrease over the next year, if central banks were to start adding too much liquidity to the markets because they believed that inflation was defeated, this could spark another wave of inflation. This is what happened in the 1970’s. Gold and silver can continue to perform well in an environment of declining inflation as investors hedge against a possible next wave of inflation.”
While current recommendations for exposure to gold for individual investors includes ETFs that hold a basket of gold and silver miners provide the benefit of diversification and reduce the risk of holding individual companies. But what does the future look like beyond these funds or traditional bullion?
Thackray says we should expect to hear more talk about ‘digital gold’ that blends the world of crypto currencies and gold.
“Essentially, digital gold will be some sort of crypto currency backed by gold,” he says. “This will allow investors to conveniently invest in small amounts of gold and possibly transact with gold. Initially, digital gold will be used as a compliment to traditional gold investments.”
