Gold, silver may be in 3-5 year bull cycle: How investors should respond

Investors should hold - not chase - gold and silver rally

Gold and silver could be entering a multi-year structural bull phase, supported by interest-rate trends, central-bank buying, and rising industrial demand, according to Emkay Wealth Management.

 

In its latest Navigator publication on precious metals, the firm said the current rally in gold and silver is fundamentally driven rather than speculative, marking a shift in how investors are allocating capital globally.

 

According to Emkay Wealth, the ongoing uptrend in precious metals marks a clear departure from earlier cycles dominated by short-term trading activity. The current phase is being powered by sustained asset allocation into gold and silver as part of diversified portfolios, reflecting a shift in investor behaviour amid heightened global uncertainty. 

 

 

“The current rally in gold and silver is not being driven by speculation, but by a structural shift in how investors globally are allocating capital,” said Dr. Joseph Thomas, Head of Research, Emkay Wealth Management. “With central banks continuing to accumulate gold, interest rate cycles turning supportive, and silver benefiting from rising industrial demand, precious metals are increasingly being viewed as core portfolio assets rather than tactical hedges. While short-term volatility is inevitable, the medium- to long-term case for maintaining measured exposure to gold and silver remains strong.”

 

What’s driving the rally

 

Several macroeconomic factors are supporting precious metals:

 

Expectations of interest rate cuts in the US

 

A potentially weaker US dollar

 

Central-bank gold accumulation since 2022

 

Rising portfolio allocation to safe-haven assets

 

These factors have helped provide price stability and downside support for gold while reinforcing investor confidence in precious metals as a long-term portfolio component.

 

For Indian investors, returns from gold have been further boosted by rupee depreciation, amplifying gains from global price increases.

 

Silver’s industrial demand adds momentum

 

Silver’s rally has been supported not just by investment demand but also by strong industrial consumption, particularly in:

 

Renewable energy and solar manufacturing

 

Electronics and advanced manufacturing

 

Electric-vehicle supply chains

 

This industrial linkage differentiates the current silver cycle from previous rallies and adds structural support to prices, according to the report.

 

Emkay Wealth notes that the pace of further upside will depend on global economic and policy developments. A moderation in global growth combined with accommodative monetary policy would continue to support gold and silver prices. Conversely, a stronger-than-expected recovery in the US economy or sustained dollar strength could temporarily slow the momentum. 

 

For Indian investors, currency movements remain a key variable, as any sharp appreciation in the rupee could moderate returns despite stable global prices.

 

For existing investors, the recommendation by Emkay Wealth is to continue holding gold and silver as part of a diversified portfolio. Any incremental additions should be made gradually and preferably during periods of correction. Portfolios with relatively high exposure, particularly where gold and silver together account for more than 25 to 30 percent of assets, should be reviewed with a professional advisor to assess profit booking while retaining strategic allocations.

 

How investors should approach precious metals now

 

Emkay Wealth recommends that investors retain measured exposure to gold and silver within diversified portfolios, rather than making aggressive allocations after the recent rally.

 

Suggested allocation guidance:

 

5–10% of total portfolio for new investors

 

Gradual investments during market corrections

 

Review portfolios where precious metals exceed 25–30% allocation

 

Investment options include:

 

• Physical gold
• Gold and silver ETFs
• Gold mutual funds
• Precious-metal-linked investment products

 

"Investments are best staggered over time to mitigate volatility, with options including physical gold, gold and silver ETFs, gold mutual funds and precious metal-linked investment products.Overall, Emkay Wealth believes that gold and silver remain well supported at current levels, with the structural drivers of the rally firmly in place. While short-term volatility is inevitable, the medium- to long-term outlook for precious metals remains constructive as investors seek diversification, stability and protection against macroeconomic and currency uncertainty," it said in a report.